§ Mr. Roger King (Birmingham, Northfield)
This, I believe, is the third debate that the House has had recently on the subject of the west midlands and its economy. We make no excuse for bringing it to the nation's attention once again. We believe that the west midlands is vital. Without a successful, vibrant and dynamic community within the heart of the country, we cannot expect industry and industrial development elsewhere to gather pace. We believe that by bringing the west midlands' plight to the country's attention, we can perhaps play our part in enabling the nation's industrial improvement to gather pace.
A brief history of the west midlands is probably desirable. The area was forged out of the industrial revolution. The small town of Ironbridge, which sits on the river Severn, was the crucible in which the industrial revolution was born. It was there that man originally learnt how to mass-produce goods. From that area many of the supply industries were spawned until eventually west midlands county, the area that contains Birmingham, Wolverhampton, Walsall and latterly Coventry, was formed.
As befits its origins, the west midlands has become over-endowed with engineering capacity—the so-called metal bashing which these days so many people tend to deride. It is that metal bashing that over the past 150 to 200 years has given us the society, economy and wealth that we enjoy today. It is an area in which the entrepreneur, the small business man, has been able over the past century or so to play his part. Many small industries that were born in the area have grown to become household names and their products are to be found throughout the world.
In common with many prime industrial areas, the ravages of world recession have played their part. However, we are affected not only by the problems of world recession but by those that are home-grown. They are the problems of lack of management, lack of productivity and a lack of products, all of which have played their part in causing the west midlands to lose its prime position as the main provider of our industrial background.
In many ways, too, we have not been helped by Government policies over the years, under Governments of all political persuasions. Regional policies have been created that have forced industry away from where it was born, from where it was acting and performing in an extremely profitable way to the regions. A prime example of this is the motor industry. In the 1950s we had a strong motor industry, but it was forced to disperse to many of the development areas in the north-west, Scotland and south Wales. Many of those factories are now no longer with us because we have seen the results to our cost, and to that of our country. The companies concerned have had to have supply lines and conveyor belts some 200 or 300 miles long. One cannot be productive or efficient with such a supply system.
The problem too is that when companies wanted to expand and add an extra 2,000 or 3,000 sq ft to complement and satisfy the demand that their products were having to meet in the market place or whenever they wanted to put up additional factory premises the 873 Government stepped in and said, "No, you cannot do it in the west midlands, but if you want to put that factory space 150 miles away, by all means do so, and with financial help from us." Forced into such a situation, companies had the choice of putting up the extra plant elsewhere or doing without it. Some chose to do without, and perhaps their decision was a wise one. Others invested in some of the development areas and have learnt to their cost the problems of running long supply lines and running the company in so many different parts of the country.
Even when we, an area so dependent on metal bashing, tried to create our own sunrise industries, the plunderers came. In the past week or so, we have heard the skirl of the bagpipes and seen the flourish of the kilts as the Scots came down the M6 offering large sums of money, and walked off with one of our original computer industries in applied computer techniques. Five hundred jobs have gone to Scotland that the west midlands thought could be ours, and could be part of a dynamic breakthrough into the world of advanced technology.
The company has gone, in its infinite wisdom, and has been seduced in part parhaps by the large sums of money provided by the Scottish development agency. That is not just a shame but a disgrace. Regional aid has never created any new jobs. Far from it, it has taken from good areas and put these industries elsewhere, where they should not be. In the end, those industries have fallen by the wayside and the jobs that were in the west midlands have disappeared as well.
We welcome, as a result of the work of many of my colleagues over the years, the appointment of my hon. Friend the Member for Coventry, South-West (Mr. Butcher) as Minister with special responsibility for the west midlands. We welcome the fact that he has accepted this challenge. We are aware of how much work he has already done in the area to re-establish it as a major manufacturing base. He has a very hard job to do.
§ Mr. Andrew Faulds (Warley, East)
Perhaps the hon. Gentleman will be so kind as to give us figures for the number of jobs actually achieved in the west midlands by his honourable colleague.
§ Mr. King
The practical fact is that we are currently interested in job retention. We shall work towards a period of job increase. In January, 1,000 new jobs will be created at Austin, Longbridge, so there are signs of a possible upturn. Jobs are not easily created by any economic activity, however, due to the productivity problems that still exist in many companies.
We must seek not more regional aid but fairer treatment for the west midlands. On average, it costs 10 per cent. more to produce a car component in the west midlands than in a development area, thanks to the subsidies given to the development areas. Companies which have moved to the development areas and taken their jobs with them can therefore undercut many of the companies which, so far, have stayed in the west midlands.
The only aid to which the west midlands is entitled is section 8 assistence, provided that the investment project would go ahead anyway with or without that aid. About £1 billion is provided by the Government to help the regions. As a small gesture, a more charitable interpretation of section 8 aid might allow certain 874 industries in the west midlands — automotive components, for example — to obtain such aid virtually automatically.
§ Mr. Robin Corbett (Birmingham, Erdington)
Would it not help if the Minister stopped destroying jobs? In the first two months of his appointment, 10,000 jobs have disappeared from the west midlands.
§ Mr. King
I am sure that the Minister will respond to that when he winds up the debate.
In considering the problems facing industry in the west midlands, we must also consider the burdens that it carries. A prime example is the rates burden. The Government's decision to abolish the west midlands county council, which is duplicating much of the work of many of the existing metropolitan district councils, is a major step in the right direction. We look forward to that taking place as fast as the necessary legislation can be prepared.
The metropolitan districts in the west midlands also face a great problem. In many instances rateable values and block grants are assessed on values fixed in 1972. Anyone who has driven around the area will know of the great changes that have occurred. As a result, local authority income from Government grant is much reduced. All metropolitan districts are in the bottom 10 for the marginal rate of grant. For every pound spent at the margin we get just 17p, whereas 18 metropolitan districts outside the west midlands get more than 35p in aid. Clearly, a reevaluation of rateable values should take place before long, but there may not be time for that. We may need a corrective multiplier, as many London councils have had in the past, to upgrade the rateable value of the area as quickly as possible.
§ Mr. John Heddle (Mid-Staffordshire)
Does my hon. Friend agree that the rates element is the major burden on manufacturing industry in the west midlands? It is nonsense that companies are forced not just to take off the roofs but to demolish their premises. Does he therefore welcome the commitment in our election manifesto to deny local authorities such as the Wolverhampton metropolitan borough council the right to levy void rates on empty industrial and commercial buildings?
§ Mr. King
I am grateful to my hon. Friend for mentioning that. It is an absolute certainty that rates have played an important part in determining the amount of factory space that is in use in the west midlands. They have caused an amazing contraction among companies that cannot afford to maintain property on the offchance that come the eventual economic upturn it will again be commissioned. Indeed, my hon. Friend has helped to dismantle a roof to underline the great difficulties that local industry must face in coming to terms with the rating policies of many district councils. Some of the absurd policies introduced by those councils over the last few years have, in fact, resulted in job losses.
One of the prime industries in the west midlands has traditionally been the car industry—perhaps a case of secular aid at its best. The Government have put a large sum of taxpayers' money into British Leyland and at long last are beginning to get value for money. Productivity is increasing and the number of cars being produced on time to the right specification is increasing week by week. As I said earlier, 1,000 new jobs will be coming to Longbridge as a result of the Triumph Acclaim move from 875 Cowley to Longbridge. We look forward to the creation of more jobs in the motor industry so that it can again become one of our prime industries.
I need not remind the House of the concern of the car workers in Longbridge, bearing in mind the unfair treatment meted out to their industry. I refer in particular to the level of Spanish imports. Much has been said about this over the last year or so, and supposedly we now have a better deal with Spain. However, the facts belie that. The Spanish can, if they wish—and they most certainly will —bring into this country between 50,000 and 55,000 Fiesta and Vauxhall Nova cars. But in the capacity from 1 litre to 1,600cc, we are able to send to Spain at a reduced import tariff precisely 997 Metros. That is not wholly acceptable, and we must look for much better and fairer treatment from Spain towards our products. We are not even allowed to send any of our 1 litre Metros to Spain. They are banned completely, yet that car is particularly suitable for the Spanish market. We do not want to deny our market to Spain; all we want is fairer treatment for our products in that country.
We must also look to Government fiscal policy such as the special car tax. Cars made here in Longbridge and elsewhere are subject to 26.5 per cent. tax, if one includes VAT and the 10 per cent. special car tax. Yet Japanese made videos attract only 15 per cent. tax. There is some irrationality there that is obvious to many of the car workers in the midlands.
We should also look at some of the problems confronting the components industry. Large sums of money have gone to the prime producers — the manufacturers—who in many cases are nothing more than glorified assemblers of other people's components. Many of those companies must operate with outdated equipment and are now facing competition from other countries, not just from Europe but from the Far East. Some special treatment for those companies, perhaps allied to the car industry through some secular fiscal measures, would he welcome.
We would be on difficult ground if people were asked what help the west midlands required, because I doubt whether they could agree on what was needed. However, the removal of the national insurance surcharge for the west midlands area is just one example of how productivity and profitability could be improved.
When we embark upon railway modernisation, west midlands industry might be encouraged to become prime suppliers for the replacement of British Rail's diesel passenger car fleet. Although such policies might be called backdoor regional aid, they are ways to stimulate and reinvest much of our expertise in manufacturing capacity.
It is necessary to rationalise some of tie industry in the area. Far too many companies are competing for the same product sphere. It has been tried in the steel and foundry industries, but in many other industries unnecessary competition still causes great problems, such as lack of profitability. The Government should carefully consider a policy to encourage rationalisation of product lines and manufacturing companies.
We hope that the area will attract a free port. It is a new experiment and the west midlands is ideally situated for the creation of a free port zone. It is at the centre of the country with reasonably good access by road and rail. It has a major airport near Birmingham. We await with interest and hope the news that a free port will come to the area.
876 Two enterprise zones have been designated at Dudley and Telford. It is too early to determine their effect on the area, but an enterprise zone in an existing conurbation may be less successful than one in a separate town a few miles away, such as Telford. Time will tell. We welcome the Government's initiative and look forward to its successful outcome.
The infrastucture of the area needs to be examined. There is still no road from the west midlands to the east coast ports. We talk about it and the Government have planned it. It exists in a pencil line all but for the battle of Naseby. All depends on the decision as to whether the motorway will go over it, around it or even under it. Until that decision is made the west midlands will be denied its major motorway to the east coast port. It is of prime importance—we need that road as a vital exit for many of the goods that we produce.
Another snag that affects much of the country as well as the west midlands is the level of apprenticeships. They used to be a vital part of our economic activity. This year only 760 apprenticeships are being created — nothing short of a disaster—compared with 3,000 in 1978. The Government are providing a number of schemes under the youth training programme, and they are on target. But we need a son of the training schemes, something to follow it.
The problem with apprenticeships is simple — industry cannot afford them. When I began my apprenticeship in 1960 I was paid £2 4s. 6d a week, which was 15 to 20 per cent. of the average working man's wage. Now, an apprentice's wage hovers between £50 and £60 a week—more than 50 per cent. of the average man's wage.
§ Mr. Dave Nellist (Coventry, South-East)
Does the hon. Gentleman agree that one of the prime causes of the decline in apprenticeships in the west midlands is that an employer prefers to employ someone free under the youth training scheme, for which the Manpower Services Commission provides funds? The rapid decline in apprenticeships is running concurrent with the rise in the number of schemes introduced by the Government, which are intended to replace time-served apprenticeships. The Government have said that they intend to abolish those during the next two and a half years.
§ Mr. King
I cannot accept that. It is clear that apprenticeships have been declining over the past 10 years not over the past 12 months. One of the prime problems of apprenticeships is that they are too expensive for an employer these days. Half of the problem has been the interminable wrangling between unions and management about the level of wages rather than the quality of apprenticeships. Far too many are dragged on for five meaningless years when they could be compressed more effectively into three years to get people through a proper training scheme.
We must not look at the youth training scheme as an alternative to apprenticeships. It is a complementary system. After youngsters have completed 12 months on the youth training scheme there should be a son of the YTS for them to go onto—an apprenticeship scheme at a realistic cost to the management. Management is already beginning to experience a reduction in skilled personnel in the area and we must address ourselves to the problem 877 of training the young. The YTS is a major step forward but it must not be seen in isolation. We need to look at it alongside the traditional form of apprenticeship.
Another point that needs to be made is that the west midlands is not just an area that is completely dependent upon its engineering industries. In the past 10 years it took a substantial initiative in becoming involved in the exhibition industry with the creation of the National Exhibition Centre. The city of Birmingham did that off its own financial bat and it cost about £47.7 million. Those hon. Members who have been to the NEC will have witnessed its amazing achievements — the compact arrangement of rapid rail transport which is adjacent to the airport, the new terminal that is now being produced with its revolutionary MAG-LEV transportation system, the considerable infrastructure of display halls, and all the paraphernalia that one needs for a massive national exhibition centre. I repeat that that was done with very little recourse to Government money. The Government contributed only about £1.6 million.
The exhibition industry is a growth area. With the present world recession, the number of exhibitions are not growing as fast as exhibitors and organisers would like, but when the economy picks up throughout the world the exhibition industry is expected to grow. That industry has been created in Birmingham out of our own regional money without recourse to the taxpayer, but it is now meeting competition from other areas which are seeking money from the taxpayer to create rival organisations. Manchester has converted an old railway station, and that is attracting a £7 million inner city grant. Manchester is not far away from Birmingham and is a potential rival to the NEC. Another exhibition centre in Scotland will receive £14 million from the Scottish Development Agency for its development. In addition, there is now a strong possibility that the London docklands will receive an exhibition centre of world standard in due course. If that is the case, there will be far too many exhibition centres in Britain. What is more, there will not be enough to fill them with and each and every one of them will become a liability on the ratepayers or the investors who put money into them.
The intelligent way to look at this matter is to set up a joint consultative board for exhibition centres so that new applications can be vetted and perhaps even licensed, otherwise Britain will become overexhibited.
I hope that my points and those that my hon. Friends will make will be seen as evidence of the fact that the west midlands is determined to play its part in the regeneration of Britain's economic fortunes. Expertise still exists in the area which is teeming with entrepreneurs who need the assistance and guidance which the Government are already giving them. It has a substantial backdrop of skilled workmen of all age groups. We must not imagine that many of the new skilled workers are just coming from the youngsters. There are many people in the 50–60 age group who still have a great deal to offer to industry and the area. All that we need is fair treatment. I believe that the Government realise that but cannot quite take the next step forward in order to bring that about. Without a dynamic, vibrant west midlands, the rest of the country cannot hope to prosper economically to anything like the extent for which we hope. I trust that my hon. Friends will agree.
§ Mr. George Park (Coventry, North-East)
In previous debates on the west midlands economy Opposition Members, including myself, have been accused of talking the region down when we were really attempting to gain some recognition and positive action by the Government to remedy the disasterous position in the west midlands. The choice of subject by the hon. Member for Birmingham, Northfield (Mr. King) and other initiatives by midlands Conservative Members may be a sign of a belated realisation that we were not merely playing party politics. I welcome the hon. Member for Northfield to the club. I hope that if we manage again to force a vote on the subject, the hon. Gentleman, who expressed candour and determination, will put his vote where his mouth is.
§ Mr. Park
I have known the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) for too long to be silly enough to allow him to intervene at this point. Conservative Members may have been helped on their way since the Government take no notice of Opposition Members. However, they may be prepared to accept statements by bodies which have no connection with the Labour party. I refer to the west midlands chamber of commerce, which says:It would be pleasant to join in the general euphoria about the UK economy if it applied to the West Midlands, but our latest quarterly economic survey indicates that we are now back to where we were when the bubble of optimism burst in June 1982.The west midlands CBI has made similar statements. It does not agree with the national body that more people should be thrown out of work. The chairman of the west midlands district council, Councillor Neville Bosworth, the Conservative leader of Birmingham city council, in a submission to the Department of the Environment, seeking a meeting, states that the problems in the west midlands are too pressing to await local government revaluation. He sets out the facts of increasing unemployment, decreasing gross domestic product, lower earnings and how the differentials in the block grant, compared with other areas, disadvantage the west midlands.
The British Institute of Management believes that Government decisions do not appear to pay due regard to the needs of industry and do not carry sufficient awareness of their impact on industry. The Building Trades Institute says that most of the decline in that industry is due to deliberate Government action to reduce spending on housing, roads, schools, hospitals and public utilities. New public construction has been halved in the last 10 years and private construction is now three quarters of the 1973 level.
Faced with that, the Government have reopened the small engineering firms investment scheme. We urged that in our last debate on the subject, and in the debate before that. I welcome the fact that 260 firms have collected £2.2 million in grants towards purchasing new equipment, but that does not begin to tackle the major problems.
The Under-Secretary of State for Trade and Industry has been given responsibility for the west midlands, but, with respect, the hon. Gentleman is being asked to make bricks without straw, since, to the best of my knowledge, no extra resources have been placed at his disposal. Therefore his appointment appears to be more of a public relations exercise than anything constructive.
I understand that the hon. Gentleman's job is to co-ordinate policies which have already led to substantial deindustrialisation in the west midlands. One can see acre upon acre of outdated plant near the centre of Birmingham. From time to time we are urged not to encroach further on valuable agricultural land. Has the Minister or any of his colleagues any intention of removing this outdated plant to create what would be a green field site near the heart of Birmingham? That would help the environment and provide purpose-built factories for new industries.
An industrial development association has been set up to promote the region and to encourage inward investment. Here we may have come to the nub of the argument. The hon. Member for Northfield signally failed to mention investment. He talked about all these active entrepreneurs and what they had done for the midlands in the past. One thing they most certainly did was to take more out than they put in. That is one of the major reasons for the decline of the west midlands.
The fact is that the providers of risk capital no longer want or need to take risks with new ventures. What incentive is there for them with interest rates as high as they are? Multinational companies — those household names to which the hon. Gentleman referred—are now making investments, but not in the west midlands. The investments are being made abroad.
§ Mr. Park
If the hon. Member for Northfield looks at those factories, he will see that that is the case. It goes even further with banks pulling the rug out from under viable companies, such as Cannings in Birmingham, and the Government allowing the taxpayer to be ripped off for the third time, as in the case of Alfred Herbert, and the Minister with responsibility for the west midlands standing helplessly by. The taxpayer has been taken to the cleaners three times by the Government over Alfred Herbert.
When the Government came to office they told the National Enterprise Board to get rid of a3 many companies as it possibly could. So Alfred Herbert was sold off at a bargain basement price to Tooling Investments. Unfortunately, it did not have the resources to carry the company through, so it was sold again at an even lower bargain basement price to Tube Investments. Now TI has the CNC lathe—a computer-controlled lathe developed with taxpayers' money — and the benefits will go to private companies that have not contributed a penny to its development.
At a time when investment is desperately needed the Chancellor proposes to siphon off £500 million of private capital in part payment for national assets, which are on the market only because they are earning profits—they would not be on the market if they were not earning profits —instead of using that potential £500 million to breathe life into struggling industries or into new ventures, such as the Birmingham airport free zone—an initiative by the much derided West Midlands County Council, which I hope will succeed.
If the west midlands is to regain its former prosperity and we are to have fair competition in the United Kingdom, the current review of regional policy being undertaken by the Department is vital. It is possible for 880 companies in other parts of Britain to undercut firms in the west midlands because of the difference in recognition given by the Government to different areas.
However, it goes further than that, as the hon. Member for Northfield said. Indeed, he must have taken careful note of the speeches made by Labour Members in previous debates. Stronger action is needed to eliminate unfair trading by other countries. The hon. Gentleman cited the classic case of Spain. When I questioned the former Minister for Trade about that, he replied that it would be dealt with within the EC. What sort of Government responsibility was that?
Attention must also be paid, as I pointed out, to the block grant differentials in local government. As the Prime Minister now realises, pointing to the faults of the rating system is much easier than producing viable alternatives. I urge the hon. Member for Northfield to examine carefully the comments of the hon. Member for Mid-Staffordshire (Mr. Heddle) about rates being such a burden on industry before he, too, follows the latest trend of blaming everybody but the Government.
§ Mr. David Winnick (Walsall, North)
Is my hon. Friend aware that the hon. Member for Mid-Staffordshire (Mr. Heddle) and I served on the same Select Committee on the Environment which looked into the rating system? It was unanimously agreed by that Committee, as it was by all the witnesses bar one, that the rating system should be retained. The Committee thought that the Government should examine the possibility of a local income tax, but there was no question of the rating system being done away with. Indeed, the Committee concluded that it would be virtually impossible to do so.
§ Mr. Park
I thank my hon. Friend for that contribution.
The Prime Minister would have realised, had she stopped to think—instead of taking off on cloud nine on some popular proposal about the rates — that, after commissions and investigations into the rating system under successive Governments, no viable alternative has been put forward. There is no such easily collectable tax as rates, with so few bad debts. All other alternative schemes contain snags. There are faults in the rating system, but we need to examine it far more carefully before saying that it should be abolished, as the Prime Minister said and then had to retract.
§ Mr. Heddle
The hon. Gentleman said that there were faults in the rating system, and I am sure that hon. Members on both sides of the House would endorse that. Does he agree that the major burden for the payment of rates falls on the industrial and commercial ratepayer, who has no voice, no vote, no say and no sanction over the way in which the local authority controls his money? Does the hon. Gentleman agree with that, yes or no?
§ Mr. Park
I wish the hon. Gentleman would permit me to answer the question he has already asked. The 881 Government continue to look for scapegoats on which to offload their responsibility for failing to regenerate industry. If the hon. Gentleman examines the rating system carefully, he may find that what I have said is based more on fact than his slogans.
Urgent action is needed in many or all of the areas to which I have referred, including the clearance of derelict factories and the introduction of a fairer regional policy, which must be knitted into a national policy if it is to make sense. It must be recognised that preferential treatment of one area will be to the detriment of another. The Department of Trade and Industry must do something positive about the appalling tariff differentials—Spain is an example—that face our exporters. If the Government believe in competition let them believe also in fair competition, for that will give our manufacturers a chance. I believe that they can hold their own with anyone in the world if they face fair competition.
If we are to halt the decline in the west midlands, the Government must take on board any or all of these items. One step in the right direction would be the removal of the special car tax. If regional policy is to be successful, it must be part of a national policy that is designed to bring hope and jobs to Britain's industrial areas.
§ Mr. David Lightbown (Staffordshire, South-East)
As is the custom and tradition of the House, I shall take a few moments to speak about my constituency at the start of my maiden speech before proceeding to the main issues of the debate. My constituency is part of the west midlands conurbation and I consider it a great honour to serve it. The hub of the constituency is Tamworth, which has a historic association with the House. Sir Robert Peel, who was a Member of this place, introduced the first democratic manifesto 150 years ago next spring. I hope that the House will recognise that in due course.
Over a number of years I have had the honour to be associated with two Members who represented the old constituency of Lichfield and Tamworth. That apprenticeship with those two Members has, I am sure, stood me in good stead. I was associated with Major-General Sir Henry d'Avigdor-Goldsmid, who left the House in October 1974. He was a fine Member who looked after his constituency extremely well. He was a close personal friend. My hon. Friend the Member for Mid-Staffordshire (Mr. Heddle), who represented Lichfield and Lamworth from 1979, is in his place this evening. I thank him for his assistance and support in everything that he has done towards my apprenticeship in representing Staffordshire, South-East.
I have been associated with industry and business in the midlands for 25 years. I have been associated with local politics for about half of that time. I know the west midlands politically and industrially. When I went there many years ago it was an extremely prosperous area. Its industries were the motor, the machine tool, the cycle and motor cycle industries, heavy and light industry—both electrical and mechanical — and many ancillary industries. Some have now gone, others are in decline, and still others are, thankfully, still surviving.
I have listened to what Opposition Members have said today. I remind them that some of the decline has been self 882 inflicted over many years through restrictive practice, over-manning, poor design and finish, lack of investment in new equipment and technology, poor management and restrictive legislation.
Other damage to the industry of the west midlands has been caused by the policies of successive Governments. My hon. Friend the Member for Birmingham, Northfield (Mr. King) reminded us of the problems of the industrial development certificates. They were the first nail in the coffin of the west midlands. They allowed expansion up to only 15,000 sq ft., so expansion beyond that had to go up to Clydeside, Merseyside, Northern Ireland or South Wales.
Regional aid, which successive Governments have encouraged, EC policies and funding have brought about unnatural splits in industries because unit costs are all important in the manufacture of the type of component that is produced in the west midlands, especially in the consumer durable and motor car industries, in which volume, space and maximum use of equipment are important.
We have suffered the lunacy of forcing supply lines out north, south, east and west away from the shop floor where they belong. That was a cosmetic move, a short-term expedient to solve some of the country's regional problems. I understand the thinking behind it, but the net result has been that we have merely moved those jobs away from where they can be effective and added to the non-costs of the companies and industries involved, thus accelerating the decline. That policy exacerbated their problems and created logistic problems that they could not overcome. We have now lost all of those jobs to overseas competition.
The hundreds of millions of pounds that have been spent on regional aid and in capital grants have had no lasting effect on the industries concerned and could well have contributed, in the long term, to their decline. I have seen machine tools, presses, assembly tracks and assembly equipment, all of which is almost brand new and partly bought with taxpayers' money, being sold off at knockdown prices to overseas buyers who will use them to compete once again with the traditional industries of the west midlands.
We must ask ourselves whether all the Government expenditure that the west midlands is involved in would have been necessary if industry had not been forced into successive shot-gun marriages. In 1964, the Labour party first invoked a shot-gun marriage in the motor industry. Would that expenditure have been necessary if we had not fragmented those industries north, south, east and west and forced them into unnatural divisions and unions, and if we had not encouraged their workers to believe that, come what may, Government would bail them out?
I hope that there is some sense of new realism in the west midlands. As my hon. Friend the Member for Northfield has said, there is some sign of improved productivity, of a part revival and of a turn for the better. I hope that that new sense of realism will be recognised by the House and by the Minister with special responsibility for the west midlands, and that we can ensure that the west midlands has a fair crack of the whip.
The west midlands has many problems as a result of the policies of successive Governments. I hope that those policies will be seriously reconsidered with a view to equability and to giving the west midlands a chance to 883 compete more favourably with the other regions, so proving that it can lead the industrial revival that we all desire to see.
Next time that I rise to speak on the west midlands I hope that the news will he better for that region and for its prospects, and that it will be recovering its prosperity and be on its way to better things.
§ Mr. David Winnick (Walsall, North)
The hon. Member for Staffordshire, South-East (Mr. Lightbown) will not expect me to agree with much of what he said, but I congratulate him nevertheless on the manner in which he made his maiden speech. He spoke with undoubted confidence and fluency, and I am sure that the House was pleased to hear his contribution to this important debate.
There are two interrelated issues before us. The first concerns the position of the west midlands economy, the narrowness of its industrial base and the fact that for too long the region has relied on the motor industry and on what the hon. Member for Birmingham, Northfield (Mr. King) described as metal bashing. It is not in any way derogatory to say that. Metal bashing has clearly served the region well. The hon. Gentleman was right, in that it has served the west midlands for 150 years and has given a fair standard of living to many people.
It must be remembered, too, that in the 1930s people came from many depressed areas to find work in places such as Birmingham and Coventry. That is hardly likely to be true today. The west midlands needs new technological industries and must become less reliant on metal bashing. There is little evidence that Whitehall has given enough attention to the problems of the west midlands and the narrowness of its industrial base. When, from time to time, I have been on depwations, not to see the Under-Secretary of State who will reply to this debate, but some of his colleagues, I have detected that the problems of the west midlands are not really appreciated, which, to say the least, is extremely unfortunate.
The other issue is the way in which the Government have dealt hammer blows to the west midlands by their economic policies. It may embarass Conservative Members to be told that when the Government were elected in 1979, unemployment in the west midlands, and in Walsall travel-to-work area, was just 5.1 per cent. Perhaps wrong decisions were taken previously in regional policy, and perhaps more work should have gone to the west midlands, but we must bear in mind the problems that existed in other parts of the country. I wonder what those hon. Members who denounce regional policy would have said in the 1950s, 1960s and early 1970s if they had represented constituencies that had unemployment similar to that which exists now in the west midlands. Even with those regional policies, which the hon. Gentleman strongly criticised, the fact is that when the Government took office unemployment in the west midlands was less than the national average.
Darlaston, which lies just outside my constituency, was still a prosperous industrial town in 1979, even taking into account all the problems of the time, which I do not underestimate, but now it has many empty and derelict factories, including Rubery, Owen Holdings. Some would say that Darlaston and similar towns in the west midlands are a good illustration of what Britain has suffered as a result of Thatcherism and monetarism. Those hon. 884 Members who believe that rates are responsible for what has happened in the west midlands, and for the return of mass unemployment, cannot be taken seriously.
For most of this Government's period in office unemployment in the west midlands has been three times as high as it was in 1979, and is certainly higher than the national average. Within the west midlands, unemployment has been even higher in the black country. In the Walsall travel-to-work area the official figure of registered unemployed is 17.5 per cent., and it has been at about that figure for some time.
A circular that is sent, I believe, to all hon. Members from the Birmingham regional office of the Manpower Services Commission states that between 1 April this year and the end of June, which is a short period, there were 58 closures in the west midlands and 18 in the black country. Some of those places may have been small, but the figures show the present position in the west raidlands. Far from any sign of improvement, it is rather the opposite, with continuing redundancies and factory closures. In that same short period, 8,389 people were made redundant in the west midlands, and in Walsall travel-to-work area the figure was 775.
Although those are the official figures, we all know that if there had not been a change in the calculation of unemployment—the cosmetic changes to make it appear that unemployment is lower than it really is — the figures for the west midlands and the black country would be much higher.
What is more unfortunate is not just the number of unemployed, although that is bad enough, but the increasing number of people who are unemployed for 12 months or more. I have mentioned before—but it must be repeated because it is a national tragedy; it affects our area as much as any other part of the United Kingdom, but at present I am concerned with all those whom we represent — the problem of those in their forties and fifties who, once they are made redundant,- find it impossible to obtain another job. What are the chances of a man of 45 or 50 who has worked for a firm for 24 or 25 years finding a job if he is made redundant?
I read some nonsense in The Economist the other week about restaurant waiting being done by foreigners. The article said that it was strange that with such a high level of unemployment so many of these people were doing that job. That reminds me of what Lord Home of The Hirsel said in the 1930s, when he argued that many of the people who were unemployed in the north could become domestic servants in the south.
What about the skilled and semi-skilled people in the engineering and allied trades who have been made redundant? Should men in their forties and fifties 5ecome waiters? Is that the best prospect that the Government can offer them? [Interruption.] I do not know what the hon. Member for Northfield is mumbling about.
§ Mr. Roger King
Is the hon. Gentleman asserting that being a waiter is a demeaning occupation? If he is, it means that there are people in this noble establishment who are somehow third-class citizens because they wait on us in dining rooms and so on.
§ Mr. Winnick
I am not saying anything of the kind. Those who have skills in the engineering trades— the kind of trades that built up our prosperity—should have the opportunity to continue to earn their living in those 885 trades. It should not be a matter of their being domestic servants or waiters, as was argued in the 1930s. This is a sign of the thinking of some Government Members. Instead of hon. Gentlemen suggesting how people can earn their living in the jobs for which they have been trained, the point is dismissed, as it was in the hon. Gentleman's intervention.
The other point that worries hon. Members is the danger that the Government's policies, as a result of further cuts in public expenditure, will mean that unemployment benefit will not increase in line with prices.
This will mean great hardship for the unemployed. The difficulties faced by them and their families should not be forgotten. There can be no justification for further attacks on their living standards. Should the Cabinet come to the conclusion which we expect, that unemployment benefit after this year will not be increased in line with inflation, I hope that Conservative Members who say that they are concerned about unemployment will join the Opposition in the Lobby to express their protests against such mean and vindictive actions.
Under the Government, Britain has for the first time suffered an adverse balance of payments in manufactured goods. Manufacturing industry has been especially hard hit, and the larger share of the burden has fallen on the west midlands.
§ Mr. Faulds
Is it not a fact that had those figures showing the extraordinary historic development that for the first time we imported more manufactured goods than we exported—the great manufacturing country of the world, the one with the great traditional history of breaking new ground in this area—appeared when a Labour Government were in office, the political parasites of the press, who support the Government come hell or high water, would have made mincemeat of the Labour Government. They failed to do that in this case, with their pandering to Government policies.
§ Mr. Winnick
—has made his comment, with which, of course, I agree. If that type of thing had happened under a Labour Government, it would have been mentioned constantly by the media.
Manufacturing investment, as my hon. Friend the Member for Coventry, North-East (Mr. Park) said, is at its lowest since 1959. Capital needed for investment has gone overseas. I well remember the Government's first and second Budgets, when the rich were given tax cuts. The explanation for that was that those people responsible for investment had to be galvanised into action and given incentives. What sort of incentive has been given to the west midlands, where manufacturing investment has been so low? What will we be left with when North sea oil runs out if the manufacturing sector continues to shrivel? Urgent steps are needed to try to remedy the position.
The Opposition are criticised sometimes for not being enthusiastic about the appointment of a Minister with responsibility for the west midlands. There is nothing personal about it. If the Cabinet makes decisions which 886 cause great hardship to people in the west midlands and the black country, what is the use of the Minister spending two or three days or more in the west midlands? He may go around saying this and that and giving encouragement, but whatever he says is undermined by the Cabinet's decisions, which are the cause of the hardship and difficulties which we are discussing. I believe that positive steps are necessary. They are far more important than the Minister spending two or three days in the region.
There must be a more realistic exchange rate to enable this country to export successfully. Much harm has been caused—the redundancies and plant closures which have been mentioned—in the past three or four years by an unrealistic exchange rate.
We must have a restriction on the flood of imported goods, such as motor car components, similar to the restrictions placed on British exports. We have been a soft touch for too long. It is time that we recognised the need for a ceiling on imports if there is to be any industrial revival. Countries such as Spain have introduced certain restrictions and I believe that we must do the same, because much of the unemployment in the west midlands has resulted from the flood of imports.
There has been insufficient investment in this country, and therefore I believe that exchange control must be restored. We have been starved of the manufacturing investment which is essential for the well-being of the west midlands. The abolition of exchange control must take a share of the blame for that. It has almost provided a direct incentive for the export of capital. People are encouraged to invest abroad instead of in this country. Holders of capital believe that they are likely to receive a better return on their money in those countries where trade unions are almost non-existent. Restrictions on the export of capital are necessary. Above all, we need some demand in the economy, because without that demand and reflation we shall not see any progress in the west midlands. That must be obvious to everyone.
If the cuts in public expenditure, about which the Cabinet seem to be coming to a conclusion, and about which there is a great deal of speculation in the press, occur, they will further damage the economy, add substantially to the unemployment and undermine—this should not be forgotten — a number of private companies. A proper construction drive would help the economy, and would certainly boost demand.
One of the things that is necessary to overcome the acute housing shortage in the west midlands is the building of council dwellings. In my borough, no new contracts for council dwellings have been entered into since 1979. When these matters are raised at Question Time with the Secretary of State for the Environment and his team, we are told that the figures for house building are somewhat better than they were last year. However, I have here a quote from the National Federation of Building Trades Employers. It is likely that other hon. Members have received this letter in this morning's post, and not just Labour Members either.
Bruce Chivers, the president of the federation says:I am particularly disturbed to note that after a brief recovery in the Spring, enquiries for public housebuilding and public works have once again deteriorated. Any further cuts in public construction expenditure would severly damage the industry and the employment prospects it offers and would jeopardise our chances of seeing any significant recovery in construction output this year.887 Like Mr. Chivers, I take the view that the construction of houses, improvements and modernisation would not only do good, but would help the construction industry and the economy generally. It would provide as well housing for those who are desperately in need.
In my borough we have a waiting list of abour 14,000 to 15,000, and I am sure that the position is similar in other parts of the west midlands. Building work would also improve houses, many of which are pre-war dwellings, and the longer they stay as they are the more expensive it will be in the long run to carry out necessary repair works and modernisation. It would also provide many job opportunities for those in the construction and allied trades within the private sector. If houses are built, much other work is necessary, all done by the private sector, for things such as furniture, fittings and the rest. A boost such as this would do the economy of the west midlands a great deal of good.
The debate serves one purpose. It will not resolve any of our problems and difficulties, because to a large extent that is in hands of the Cabinet. We have however, a duty and a responsibility to ventilate our grievances and the difficulties of our constituents. The fact that the west midlands has an unemployment rate higher than the national average, and that that has occured since 1979, must not be forgotten. Our increase in unemployment has been highest in the United Kingdom, and that it is an indictment of Government ecomonic policy and its effects on the west midlands.
The Labour party will do its utmost to raise these issues time and again, because we believe that it is necessary to do so to get the important revival in the economy. If that revival occurs, the first beneficiaries will be the people in the west midlands.
§ 11.9 pm
§ Mr. Gerald Howarth (Cannock and Burntwood)
I am grateful to you, Mr. Deputy Speaker, for calling me in this important debate to make my maiden speech. I cannot say that it is a great pleasure to follow the hon. Member for Walsall, North (Mr. Winnick), but it is a pleasure. He will not be surprised to learn that I do not share his enthusiasm either for the seige economy or for the building of more council houses whose rents will be further subsidised by the ratepayers.
It is a rare and great privilege for me to come to this House as the representative of a part of this great kingdom of ours. This, the Mother of Parliaments, with its somewhat strange customs evolved over seven centuries, has brought forth men and women who have shaped the course of history. It has set a pattern for other nations to follow, it is admired by our friends throughout the free world, and it is looked upon with great envy by those who labour under the heel of Marx and other totalitarian Governments.
§ Mr. Howarth
I should prefer not to be interrupted. The hon. Member has already done his share of interrupting. So far I have not had even a maiden heckle.
I am sure that I am not alone in feeling a great sense of pride at being elected to this House—a pride which I hope is tempered by humility and the consciousness that 67,000 people look to me to represent their interests in this place. Above all, it is the attainment of a goal. As Alexis de Tocqueville said in the middle of the 19th century, 888There is a thirst for political rights and a craving to take part in public affairs which seem to torment Englishmen throughout their lives.Many wives and girlfriends of aspiring politicians will recognise that syndrome only too well.
I have the honour to represent the new Staffordshire constituency of Cannock and Burntwood which is bordered by the A5 to the south and Cannock Chase to the north. For those hon. Members who are still lost, it lies just to the right of the Hilton Park service area near junction 11 on the M6. The constituency is composed of part of the former Cannock and Rugeley constituency and the Burntwood part of the former Lichfield and Tamworth constituency. It also encompasses the communities of Hednesford, Heath Hayes, Norton Canes, Cannock Wood, Chase Terrace, Chasetown and Hammerwich.
From 1974, Cannock and Rugeley were represented by Gwilym Roberts who, by all accounts, was a diligent servant of his constituents. He will be remembered by the House as the first hon. Member whose thoughts were broadcast to the nation on the popular wireless programme, "Order, Order" which became a full-time feature of the House in 1978.
The right hon. Member for Manchester, Gorton (Mr. Kaufman) paid a kindly tribute to Gwilym Roberts in The Times, referring to him asa necessary eccentric, championing left-handed victim of antisinisteralism.As one with physical rather than political sinisteralistic tendencies, I hope that Mr. Roberts will continue outside the House to fight the left-handed fight.
I join my hon. Friend the Member for Staffordshire, South-East (Mr. Lightbown) in paying tribute to my other predecessor, my energetic hon. Friend the Member for Mid-Staffordshire (Mr. Heddle). So carefully did he till the soil in Burntwood that my constituents continue to write to him, imagining that he is still their Member of Parliament. I wish to thank him for all that he did to assist me in coming to this place and for giving me of his great knowledge of the part of his former constituency that I now represent.
I will spare the House a lengthy description of my constituency. Suffice it to say that it has changed in recent years from an area dominated by coalmining to ore in which light manufacturing industry provides up to 40 per cent. of employment. Lucas, Bowmaker and Durapipe all have facilities in the constituency, as does Fletcher International which, unlikely though it may sound, manufactures power boats 70 miles from the sea.
Former pit sites have given way to attractive modern housing estates where much of the population commutes to other parts of the west midlands, and new industrial units have been promoted by the local authority and by private developers. Compower a wholly-owned subsidiary of the National Coal Board and the major NCB computer operation, now provides services to private companies as well as playing an important role in training young and not-so-young people in the area. The nature of the constituency is thus constantly changing to meet the challenge of the 1980s.
My constituency is surrounded by beautiful heart of England countryside. Cannock Chase to the north was formerly a royal hunting forest and in 1958 was declared an area of outstanding natural beauty. Sadly, it is better known to the popular mind as the scene of certain darker deeds.
889 As many hon. Members know, and as has been mentioned many times today, the west midlands has been especially hard hit by the recession. As the hon. Member for Walsall, North said, unemployment in the Walsall travel-to-work area, which covers my constituency, is now 17.5 per cent., compared with 15 per cent. in the region as a whole and 12.5 per cent. nationally.
As I have said, however, my constituency is used to change. It has adjusted to the closure of exhausted mines without a great deal of fuss or public demonstration, and I believe that the indomitable spirit of its people will see it through the present period of difficulty. The midlanders are straightforward, sensible, people. Not only were they sensible in the recent general election, but the people of Cannock have a knack of producing somewhat unexpected results. In 1970, my hon. Friend the Member for Staffordshire, South (Mr. Cormack) upset the applecart by his famous victory with a majority of more than 1,000 votes over Miss Jennie Lee. He came to speak for me during the recent campaign and I have no doubt that his help secured what I hope was an equally famous victory in 1983.
The people of my constituency and of the west midlands in general know that Governments have no money of their own but only what they raise through taxation or borrowing. Their understanding of that truth was, I believe, made clear by the recent election result. They know, too, that real jobs will exist only if we produce goods that people are prepared to buy, at prices that they are prepared to pay, and if we deliver those goods on time.
I must tell the hon. Member for Walsall, North that jobs are being created in the west midlands, and indeed in his constituency. If his memory goes back as far as the heady days of the election campaign, he will recall that he and I had the pleasure of attending the opening of a British lighting factory in his constituency, promoted by a constituent of mine. I grant him that that has not created 1,000 jobs, but it is creating five or 10 jobs, perhaps 15 if it goes well. It produces a good product. It has the backing of British money through the British banking system. So far as I am aware, there is no Government handout involved. It has the backing of commercial money and is an example of private enterprise working in partnership to produce a British product for sale overseas.
The small and medium sized firms in my constituency know what is required for survival. They have cut out overmanning and other frills and are now fit and ready to see off the competition. To give one example of cutting frills, I walked through the main door of a company recently to find that there was no secretary or receptionist but merely a telephone with a sign asking visitors to dial the number given. That firm knows how to cut its garment according to its cloth.
People in the west midlands are not asking for Government handouts or special status. As the hon. Member for Walsall, North and indeed Conservative Members have said, the people of the west midlands want fair trade and even-handedness by Government.
I agree with my hon. Friend the Member for Darlington (Mr. Fallon), who with other hon. Members has said that the enterprise zones are merely another distortion in the United Kingdom's investment and trading pattern and that they must cease as quickly as possible.
890 My hon. Friend the Under-Secretary of State attended the industrial exhibition "Expo 1983" at Cannock earlier this month. He will have seen the enthusiasm of the local industry, without the support of such things as an enterprise zone, which supported that exhibition. I hope that he will work to ensure that the siren voices of other hard-pressed areas in the Kingdom do not prevail.
There is, however, a role for Government in all this. There are many schemes to which the Under-Secretary has drawn attention on his visits to the west midlands. Those have been brought to the attention of companies that perhaps were not aware of the real but relatively inexpensive aid that is available to industry. Industrialists also want hard evidence that the Government are putting their own house in order by taking the kind of tough decisions that are taken in the factories and offices every day. They want to see government leaner and fitter, just as government wish to see industry leaner and fitter.
The first priority must be to continue the reduction of public spending, followed by a reduction in the tax burden. High public spending is invariably an inefficient use of the nation's resources. It imposes burdens on the wealth creators and drives up the cost of money. The CBI has calculated that each 1 per cent. reduction in interest rates is worth £300 million to industry. I therefore find it wholly and utterly irresponsible for the Opposition continually to say that they want to see a lower value for sterling. They will never say how far they want it to go down, nor will they spell out the consequences of that policy.
We are a trading nation. We import goods and raw materials that we turn into finished products. If we depress the price of sterling, we simply push up the cost of our products and basic materials. Such a policy is entirely irresponsible, and perhaps one day the Opposition will give the figure. But, whatever they say, they are unlikely to have the same disastrous effect on the foreign exchange market as did the shadow Chancellor, who last November called for a 30 per cent. depreciation in sterling, because they are unlikely to influence the level of sterling for the foreseeable future.
Secondly, we must continue to reduce the role of government. I warmly welcome the announcement of my right hon. Friend the Secretary of State for Trade and Industry that further efforts will be made towards denationalisation. I hope that he will consider urgently the proposals of professors Beesley and Littlechild in the Lloyds Bank Review, who have suggested that we should examine seriously the possibility of introducing private capital into the electricity generating industry, British Railways, the coal industry and the Post Office.
Thirdly, as well as reducing the tax burden, which I believe to be a high priority, we must simplify the tax system. The system is relatively simple for the standard PAYE taxpayer, but there is far too much complexity for those engaged in their own businesses, as I am now discovering in my new position as a Member of this House. The complexity of the system is quite unacceptable and must be simplified during the lifetime of this Parliament.
Fourthly, we must continue to make progress towards a framework of responsible trade union law, to create the conditions in which both sides of industry can combine to create wealth rather than to hand business over to our competitors as a result of restrictive practices. That was 891 mentioned earlier by my hon. Friend the Member for Staffordshire, South-East (Mr. Lightbown). We must continue down that road.
Although some of our problems may be self-inflicted, many of them are the result of the lack of orders from overseas because of the downturn in world trade. When the pick-up comes, we must be ready to meet the demand for our goods and services. As my hon. Friend the Member for Birmingham, Northfield (Mr. King) so ably pointed out, that will not happen if, through well-intentioned but misguided regional policy, we starve the heartland of British industry of its share of private capital.
§ Mr. Robin Corbett (Birmingham, Erdington)
The hon. Member for Cannock and Burntwood (Mr. Howarth) would be both amazed and alarmed if I congratulated him on the contents of his speech. However, I congratulate him on having made his maiden speech. He spoke with enthusiasm about those matters in which he believes. I shall give him a friendly word of advice—for which, of course, he did not ask. He will have his work cut out in the Cannock part of his constituency in following my former colleague, Mr. Gwilym Roberts, who so diligently served his constituency and the House—albeit at times with a certain eccentricity.
The economy is primarily about people. It is not about money, profit or productivity. I profoundly believe that the economy should be the servant of the people, not vice versa. It should be about—although it is not—how the skills and talents of people are being developed and used to achieve an economy that enables us all to live with hope and dignity.
Manufacturing industry in Birmingham and the remainder of the west midlands, once the heartland of such industry, has been turned into a wasteland. Men and women floating around in Erdington never expect to work again. Youngsters go from school to the dole queues at the ages of 16 and 17. They never expect to work. That is one of the realities of life in the west midlands. The pride has been knocked out of and taken away from the west midlands, It has been turned from one of the most prosperous areas in the country four years ago to the least prosperous now.
In my constituency, as elsewhere in the west midlands, for every one person jobless in 1979 there are now three. There are 46 unemployed people chasing every lone job vacancy. At one school, about half of the pupils in one form have both parents out of work. That is the real world of the west midlands. Out of every 100 school leavers who walked out of the school gates a year ago, 17 found work, 24 joined the dole queue, 38 were massaged off it into special schemes and 21 went into higher and further education. The prospects are worse this year because more firms have closed and the numbers being allowed into higher and further education are, by edict of the Government, being cut.
It is no wonder then that the Minister told me in a written reply on 19 July, when I asked for an estimate of what would happen to this year's school leavers:I am not in a position to make a forecast for 1983."—[Official Report, 19 July 1983; Vol. 46, c. 90.]A more honest answer would have been, "We dare not make a forecast." The unanswered question of the last election from those standing for the Conservative party 892 was, "When will unemployment come down'?" Neither here nor outside has any member of the Tory party even guessed at a date.
The Government are learning, although not vet admitting, that it is financially and socially unacceptable to continue to add to the dole queue. It wastes the talents and energies of people and means that the dwindling number left in work have to pay more for poorer services, which have to be cut and cut again— as will happen before this year is out.
Rising unemployment in the west midlands, particularly in manufacturing, means a falling home demand which undermines the base from which the rest of our manufacturing sector is expected to export. One has only to walk round the west midlands to read the names on the industrial tombstones. I refer to Pressed Steel Fisher, which has closed, where 7,000 jobs have gone; Lucas—20,000 jobs gone; Dunlop—15,000 jobs gone: GKN—17,000 jobs gone. Partly because of falling profits here under this Government, partly because of the devastation of the economy and partly because exchange controls have been removed, companies such as Dunlop, Lucas and GKN have invested heavily abroad. More simply, they have exported jobs.
Fears persist in the west midlands that Dunlop plans to end car production at the fort, with a loss of up to 1,000 jobs. That company, belatedly, has undertaken to consider and respond to proposals by the General and Municipal Workers Union about the future of the fort, possibly by the end of July. It does not help when workers at Dunlop are offered a zero pay rise while the chairman of the company and president of the CBI receives a 21 per cent. pay rise. Such job losses cannot continue. No adequate manufacturing base will be left when the Prime Minister's recovery happens. There will be no Phoenix—just the ashes.
Fewer cars being made and sold in Britain means fewer tyres and fewer British-made components. The trade unions and the British Automotive Parts Promotion Council have said that that industry has sacked 46 per cent. of its work force in the last three years.
I hope that neither the Minister nor Government Back Benchers will claim that they can now see light at the end of this dismal tunnel. There is no real prospect of that—only of worse. Why is that? I shall give two brief examples. The Government announced, on the last day that the House sat before the election, that they planned to flog British Leyland as a whole or in bits. That cheats the taxpayer of a proper return on the capital invested to put BL right after the bungling and neglect of the former private owners. That is not my verdict; that is the verdict of the then Under-Secretary when he spoke in a debate on unemployment in the west midlands on 26 February this year. He talked ofthe lack of sufficient new models to beat the competition and meet consumer preference here and abroad". — [Official Report, 26 February 1983; Vol. 37, c. 812.]What a glowing testament to the former bungling, private owners of British Leyland and other parts of the motor industry on which the west midlands relies so heavily.
§ Mr. Roger King
The hon. Gentleman is laying the blame for the motor industry's decline on management. What about trade unions, restrictive practices, feather bedding and lack of productivity? What about the measures that successive Governments, many of them Labour, have introduced to weld the industries together 893 and to make them into one big organisation? Let us remember Mr. Tony Benn's attitude. He said, "Get them all together and make them big."
§ Mr. Corbett
I am a simpleton in these matters. I thought that the shareholders, directors and managers were responsible for managing the businesses that they are paid to run. Clearly the hon. Member for Birmingham, Northfield (Mr. King) takes a different view. Perhaps he is advocating a vast extension of industrial democracy so that everyone in an enterprise is involved. If there is a slight chance of better decisions, I am in favour of that.
§ Mr. Corbett
I accept what my hon. Friend says. Recent history, not only at British Leyland but primarily in that company, will remind the House that the unions were constantly knocking at the door of management pleading for more money to be put into research and development. The unions could see what was happening, apparently long before management.
The economy of the west midlands will get worse rather than better in the short term for another reason. The Secretary of State for Social Services has now been ordered to sack 6,000 to 8,000 doctors, norses and ancillary workers by March of next year. How many of those sackings will be in the west midlands? I am sorry that the right hon. Gentleman, a west midlands Member, is nut in his place, but perhaps the Under-Secretary of State will be able to answer that question. Apparently the right hon. Gentleman did not hear the Prime Minister, during the election, say that the National Health Service "is safe with us". Perhaps the Prime Minister simply meant only until 10 June. I now trust that the right hon. Gentleman will offer up his own job before he agrees to a single sacking in the National Health Service following these latest instructions.
Of course, there is a better way to proceed in these matters. We have a chance in the west midlands to learn from what was done just over 100 years ago in Birmingham by the father of radical pre-Thatcherite Toryism. Joseph Chamberlain actually used ratepayers' money—not even taxpayers' money—to take over the electricity and gas supplies. Then he took over the tramways, built Corporation street, littered the city with art galleries and libraries and cleared the slums. That was not the end of it. He then went back to the electorate in Birmingham and held a poll. There was a dear scheme and a cheap scheme for building reservoirs in the Elan valley to ensure plentiful supplies of fresh water for the city of Birmingham. He persuaded the ratepayers of that farsighted and radical city—that it must be, because it has a majority of Labour Members—
§ Mr. Corbett
Never mind "just"—one is enough. He persuaded the ratepayers of the city to vote for the biggest of the two schemes.
§ Mr. Corbett
I shall give way to my hon. Friend in a moment.
There were those who, like some today, went around saying, "We cannot afford it." Joseph Chamberlain told them:A corporation that is afraid to borrow is too timid to do its duty.That applies to the Government today.
§ Mr. Winnick
Does my hon. Friend agree that, had the Prime Minister been around at the time, she would have denounced Joseph Chamberlain as a notorious municipal Socialist and argued strongly that the schemes he was putting forward on a municipal basis could well be done by the private sector?
§ Mr. Corbett
My hon. Friend is right. I dare say that there are occasions when that old gentleman spins around in his coffin amd tries to work out what has happened to the Tory party since he left it. He did not volunteer to leave —he was called away from it.
We need a partnership of public and private money with the full involvement of people at work to revitalise the manufacturing base in the west midlands, especially in vehicles and metal manufacturing, and to encourage the development of new industries. I do not believe that either the service sector or the small firms in the region will be able to provide the number of jobs that the region needs if we are to get people back to work. Nor do I think that there is a substitute for revitalising the manufacturing base. We need that manufacturing base. It is sited in the west midlands and it will be vital if and when the Prime Minister's recovery takes off. It is vital, not only for jobs, but in the national interest, that BL has the facility to develop a new engine range. About 50,000 jobs at Longbridge could be at stake. The matter is of such vital national importance that the decision is far too important to be left to a board of directors. The Government should have a say in the decision.
I agree with my hon. Friend the Member for Walsall, North (Mr. Winnick) that ceilings should be imposed on the volume of car imports, and I should like to see the imposition of a specified majority of United Kingdom car components. The alternative is to turn us into mere assemblers of foreign products.
Government support is essential to re-establish a major British machine tool capacity, especially in numerical and computer-numerical tools. Profits have fallen too much under this Government and their predecessors for that to be done without public funds.
Construction can provide much-needed new jobs. We should be building new homes, renovating the pre and post-war homes that are falling into disrepair, emptying the hideous and structurally suspect tower blocks and ensuring reliable and efficient repairs in return for profit-making rents. Jobs and savings in energy conservation would be more than paid for in reduced national energy costs.
More than half of the jobs lost in manufacturing in the west midlands since 1965 have gone since 1979. That much must be laid at the door of the Government. More than seven out of every 10 lost jobs in the west midlands have been in metal bashing. Six jobs an hour—1,000 jobs a week—are being destroyed in the region. What a waste, what a record. The way to reverse it is there. Unhappily, with this destructive Government, the will is not.
§ Mr. J. F. Pawsey (Rugby and Kenilworth)
I hope that the hon. Member for Birmingham, Erdington (Mr. Corbett) will not grumble if I do not follow him down the road that he signposted, though, if he was calling for a ceiling to be placed on imports of Japanese cars, I endorse that view.
We have had an interesting debate and I am sure that my hon. Friend the Under-Secretary of State for Trade and Industry has, with his usual care, noted what has been said and that we shall have the benefit of his thoughts later.
The debate has been notable for the interesting maiden speeches of my hon. Friends he Members for Staffordshire, South-East (Mr. Lightbown) and for Cannock and Burntwood (Mr. Howarth). They spoke with knowledge and obvious sincerity, and their constituents are fortunate to be represented by two such hard-working hon. Members. I am sure that the House will join me when I express the view that I am looking forward to further contributions from them.
The debate is principally about unemployment. It is fair to remind the House that, between 1979 and 1982, unemployment rose faster in the west midlands than in any other region. It literally trebled. In 1979, the west midlands was eighth in the league table of unemployment rates. It is now equal third with Wales, and behind only Northern Ireland and the north. The league table shows that in 1979 our region had 5.2 per cent. unemployment. It rose to 6.8 per cent. in 1980, more than doubled to 13.4 per cent. in 1981 and increased to 15.3 per cent. in 1982. So far this year, it is 15.4 per cent. The situation is appalling.
This if the first time that the west midlands has suffered unemployment on such a scale. To make matters worse, we have moved from relative affluence to real depression in about four years. The principal reason for that is the world depression, which has been fuelled by a 16-fold increase in the price of oil. The west midlands has felt the effects of the depression more than most, because we have always been an export-oriented region, not just in motor cars but in machines, engineering products, aircraft engines, fighting vehicles and tools of all sorts.
The west midlands was undoubtedly the toolroom of the world. But as demand eased throughout the world, so factories in the region began steadily to decline, and the decline was exacerbated by certain political decisions taken by Governments, who decided that we should not supply traditional markets, for example South Africa, with our products.
Other factors played a part in our industrial decline and many problems have been of our own making: the appalling labour relations that existed for so long across the whole region; overmanning, which made us uncompetitive; lack of productivity; resistance to new methods; poor management decisions; and a lack of investment. All have militated against the west midlands.
§ Mr. Nellist
The hon. Gentleman referred to hardship, affluence and over-manning. Can he explain how all of those could have operated together in one company, GEC in my constituency, where redundancies have been declared in recent weeks in two plants, short-time working has been introduced and the company has asked the Government for short-time subsidy, yet the firm has over 896 £1.1 billion in the bank made from the labours of its work force? How could overmanning have caused that amount of profit to accrue to the company?
§ Mr. Pawsey
That shows the error I made in giving way to the hon. Gentleman, an error that I shall not make again.
The reasons which I advanced a few moments ago are not the only reasons for our problems. Governments have not exactly done the west midlands many favours, either. For example, regional policies and IDCs ensured that jobs and factories left the area in a steady stream during the 1960s and 1970s. I have a theory which I have formulated as "Pawsey's law of government"—nothing is so bad that it cannot be made worse by well-intentioned Government interference — or, like hell, the way of Government, all Governments, is paved with good intentions.
Let us examine one facet of Government interference —regional policy—well-intentioned and designed to do good. This point was well made by my hon. Friends the Members for Birmingham, Northfield (Mr. King) and for Staffordshire, South-East (Mr. Lightbown). Has regional policy any worth in today's employment climate? Does it create one extra job, with the possible exception of jobs found for those involved with the implementation of regional policy itself?
At best, regional policy simply moves jobs about the country, a form of musical chairs played with people, jobs and industries. At worst, it destroys jobs and industries. Regional policy is expensive, not just in funds but in factories and work. As currently structured, regional policy undermines areas like the west midlands.
The west midlands is still engineering-oriented. It has the skills, expertise and infrastructure needed to sustain it. It has the component manufacturers for the motor industry, the foundries and specialist press shops. But, far more important, it has the traditions and skills, a workforce that is geared to the demands of quantity production. All these are part of the same equation and they are all needed to ensure the success of the region and the industries in it. I doubt whether it is possible successfully to transfer any established industry from one region to another.
Mature transplants are not notoriously difficult. As regional policy is presently structured, it works against the west midlands. If all things were equal with all regions receiving similar grants and similar concessions, the west midlands would bloom. However, the competition is unfair, and even though it is unfair it is unsuccessful.
I shall quote some examples of just how unsuccessful regional policy is and remind the House of the major failures. There was the Invergordon smelter, the British Leyland plant at Speke, the Ford plant at Halewood, the Fort William paper mill, the famous judgment of Solomon in 1958 by which new steel strip mills were built in Scotland at Ravenscraig and in Wales at Port Talbot, the attempts to save shipbuilding in the Clyde and the decision to force Inmos to locate its production plant at Newport rather than Bristol. My favourite example is Linwood. A car factory was taken from Coventry and that decision gave us a production line that was about 500 miles long. That flew in the face of common sense and geography. It is significant that Linwood has folded along with many of the other examples that I have quoted.
I do not argue against aid for industry, but I argue against aid that is based on geography. There may be 897 reasons for providing aid for specific industries, and it is worth while recalling that £1 billion of aid has been provided to Leyland, but aid does not have to be in the form of a grant. It could be in the form of specific tax concessions. It could, for example, allow companies to recover the VAT that is paid on company cars and it should be remembered that most company cars are British and made in this country. Lower corporation tax could be directed to specific industries. The special car tax could be removed. We could even introduce certain forms of rate relief.
Industry exists to produce goods that people want at prices that they can afford. There does not seem to be much point in shoring up industries that are producing items that are not required, for sooner or later, despite the good intentions, those industries will fail and jobs will be lost. The job losses are not confined to the outdated industries. They extend to the weakened industries in the midlands that have been bled white over the past 10 years.
The west midlands requires a new look. In transport, for example, the M40 programme should be accelerated and brought forward, as should the A1-M4 link. The former programme would reduce the appalling congestion which we all know exists on the Ml. This congestion leads to many delays and fatal accidents. The construction of a clear route to the east ports would assist our manufacturing industries. These schemes would also help the construction industry. They would provide much-needed jobs, and real jobs at that.
A new look is needed at ways of encouraging inventiveness and bringing it to profitable fruition. In helping industries to have a future, and that certainly includes the motor industry.
I end on an optimistic note by quoting from a CBI newsletter which we received only today. It is perhaps because it was received only today that Labour Members have studiously avoided mentioning it. It states:for five successive months firms' expectations have pointed to increasing output …Both total and export order books have improved slightly confirming the strengthening of demand apparent in recent Surveys.It is not, therefore, all doom and gloom. Matters are beginning to improve and those who have eyes to see can discern that improvement. In the Business News, The Sunday Times yesterday quoted a survey that has been produced by Metalworking Production which showed that many new numerical control machines are being installed.
It said:it is an unexpected story of industrial revival rather than decay.That is the phrase that I should like to leave uppermost in the minds of hon. Members. It is good news for industry, the west midlands and for the country.
§ Mr. Deputy Speaker (Mr. Ernest Armstrong)
Order. I remind the House that there are still a few hon. Members who want to catch my eye and that the Opposition Front Bench hopes to catch my eye at 12.22 am.
§ Mr. Faulds
Rugby and Kenilworth (Mr. Pawsey)— I should not have forgotten that historic area that he also misrepresents. The hon. Gentleman is hardly a maiden speaker in these debates as those of us who have been here for some time have a sense of déjà vu about it. We have been over this course time and again in the past four or five years.
It is interesting that the hon. Member for Rugby and Kenilworth spent most of the time repeating the long litany of disasters that have befallen the west midlands in the past few years. He used the phrase, "absolutely appalling" which is an indictment of the Government's record. He was even more specific and said that the decline had happened in the past four years. I welcome such honesty from Conservative Members, because they usually try to evade the facts of the case and pretend that there is a long history of decline in the west midlands. There is some truth in that argument, but it is minute. Most of the decline has been a direct result of the Government and its previous incarnation.
I should really be in bed at such an advanced hour as I am an elder and distinguished statesman. However, I have resisted the temptation that bed often presents to me and decided to make my contribution to the debate. During 17 years, I have seen the most appalling change in the industrial and economic climate of the west midlands. When I first moved into the remarkable, interesting, arresting and lively area of Smethwick, it had one of the best industrial, economic and employment records in the country. The unemployment rate was 1.6 per cent. Someone who lost a job or wanted to change jobs in Smethwick just went round the corner and got another one. There was no problem. There was massive employment opportunity in the area.
Seventeen years later and after four years of Conservative policy — the Friday before the recent general election—male unemployment in my part of Smethwick was 20 per cent. Nobody could have conceived a collapse of that dimension a few years before the right hon. Member for Finchley (Mrs. Thatcher) took over the office of Prime Minister. That decline is a measure of the disaster that she has wrought. All experienced and inexperienced Conservative Members know that it is true that the west midlands is one of the areas that has suffered the greatest disaster, directly because of the policies of this and the previous Government.
Some of us, in our usual frank and honest way, pointed out many years ago while some Conservative Members were still in their blue romper suits at whatever public schools they went to—I exclude, of course, the hon. Member for Derbyshire, South (Mrs. Currie), who was wearing other types of garb—
§ Mr. Faulds
Possibly, I do not inquire into the history of these gentlemen because I do not find them interesting except as fodder for whatever policies the Government demand their support for.
§ Mr. Faulds
I shall get on with it in my own time. I have plenty of time—about one hour—in which to speak.
§ Mr. Faulds
That may be why the hon. Lady speaks more sense than some of her colleagues.
As I was trying to say when I was so pleasantly interrupted, some of us were putting forward the argument many years ago that the main problem with west midlands industry was its near total dependence on the motor car industry—[Interruption.] That is not a new fact. Some of us were saying as much when these youngsters had not yet realised a few of the political facts of life. The unfortunate fact is that too many hon. Members on both sides of the House still emphasise that dependence in their speeches. The hon. Member for Birmingham, Northfield (Mr. King), who had the good luck to introduce this debate, still seemed to over emphasise, the importance of retaining the car industry as one of main economic and industrial factors in the west Midlands. We have heard that from both sides of the House. It is a most unfortunate view.
It is nonsense to believe that we in Britain can any more command the world markets in terms of car production. That simply is not on, for a number of reasons. I shall not rehearse the whole lot, but there are one or two obvious ones. First, there is the production in the new industrial countries. I do not think that enough hon. Members are aware that a number of the new industrial countries are producing massive numbers of motor cars. Japan is not the only example. South Korea and India cannot be forgotten. Many of us disregard India, but it is now one of the great industrial countries in the world. Those countries are producing cars at much lower labour costs than we can produce them. We shall never beat those producers with our more expensive labour costs, or with the in many ways much better cars that we still make in Britain.
There is another factor. The international operations of the multi-nationals mean that the production of cars is spread over several countries. Assembly is done with bits of components from a number of different countries. Therefore, there is no way that Britain will ever again command the world market in motor cars. The sooner that we accept that, the healthier for west midlands industry.
§ Mr. Roger King
I am most grateful to my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey). I did not wish the hon. Member for Warley, East (Mr. Faulds) to give way. I was saying that the hon. Gentleman was more or less implying that the motor industry should surrender, pack up and go home. If that is so, where will all the jobs come from?
§ Mr. Faulds
If the hon. Gentleman had contained his impatience for a moment or two longer he would have heard me explain what I think should happen. I shall shortly proceed to do that. I am not advocating surrender for the production of the motor car. There are types of 900 motor car that we can produce better than most other countries. If the hon. Gentleman had been listening with the attention that he should have paid to the speech of an elder hon. Member he would have known that the idea is that our production of motor cars cannot command the world market as it used to do. I do not think that the hon. Gentleman's colleagues on the Government Front Bench would dispute that. Anybody who wants to dispute that is simply flying in the face of the facts.
I do not want to go into too great detail, because at 12.2 am my advanced years tell me of the need for some rest. However, I want briefly to rehearse the factors that should be considered when deciding what is needed in our approach to the industrial and employment problems of the west midlands. I shall now answer directly the point raised by the hon. Member for Northfield, who was kind enough to refer to me as his hon. Friend. Perhaps a happy relationship will develop over the years. I think that it was a little premature and somewhat impertinent of the hon. Gentleman to address me in those terms, but we have to live with such things.
§ Mr. Faulds
Does the hon. Lady wish to say something? If she does not wish to say anything, I suggest that she keeps silent, and she may then learn. This is a very serious problem and I am sorry that it is being treated with such levity at this hour. Some of us have been saying for many years that what is needed is massive Government investment in the advanced technologies. The west midlands will not get lift off until that happens. Sadly, unless the Minister can convince the Government to the contrary, the Government will not pursue that policy. Until—like all the advanced countries—we get that massive investment in the advanced industries, the health of the west midlands will not be revived. That is the first point.
We have also made the second point for many years. I refer to the ridiculous concentration on the production of what is increasingly becoming an outdated product. We should diversify into several other industries. There is far too much reliance on a limited supply of certain components connected with certain products. We have not yet done that, but I do not blame only this Government for it. Other Governments are to blame, because we should have started that policy many years ago.
Not nearly enough effort has been made, whether out of political embarrassment or lack of knowledge, to collect the moneys available from the European Community that could help to improve industrial and economic life, and the employment prospects, of the west midlands. I agree with some of the arguments of my hon. Friend the Member for Wallasey—[Interruption.] There are so many Members in this enlarged House of Commons that it is easy to forget even one's oldest friends. I do not agree with the idea of my hon. Friend the Member for Walsall, North (Mr. Winnick) of import restrictions. That is nonsense, and one would be defending British industry from healthy competition. However, I strongly support his argument about the need to restrict the export of capital. It is nonsensical that we should provide money for jobs abroad when we need every penny that we can get for jobs in Britain.
As a final point in what I believe we should do about the problems of the west midlands, we should make much 901 more use of the tourist potential of the area. I know that some hon. Members would giggle at that, and would wonder what tourist potential the west midlands has. It has enormous tourist potential. Not everyone wishes to look at pretty boys dancing in ballet. Some people wish to see the industrial history of Britain, which is packed tight in the west midlands. There are many museums and industrial archaeological set-ups. People will wish to come from the four corners of the world to see where some of those industries blossomed, and nowhere is better than places such as Dudley and Smethwick. This is a Government responsibility, and I hope that the Under-Secretary of State, who seems to be nodding—I am glad that he has raised his head—will argue with the Government that there is a need for investment in the tourist industry.
There must be investment in hotels. Those of us who occasionally have to stay in the hotels in the region do not always have the happiest tales to tell about the nights that we have spent or the food that we have eaten. We must provide much more support—this is a larger debate than we can have tonight—for the museums and art galleries of the area, for people who want such enlightenment or uplift if they come on a trip from Japan or the United States. It is a fallacy to believe that the west midlands is packed with dark dungeons and factories. There are many green places in the west midlands, and many lovely old villages throughout the area. The Government must consider what they can do to help the organisations that are trying to increase the tourist potential of the midlands.
The Under-Secretary of State is profoundly worried about the unemployment and the prospects of employment in the west midlands.
He has a genuine conviction about his job, but if he wishes to have any practical effect—if he wants his job to have any meaning — he must be very tough and bloody-minded with the members of his Government, because they will not listen to what has been said by hon. Members on both sides of the House about the help needed in the west midlands to create job opportunities, to revive industries and to set up new industries. He will have no success in that unless he changes the entire philosophical approach of the Government. Much as I admire him personally, I believe that he has a big job on his hands with that phalanx of people who are absolutely convinced of the rightness of the ideological commitment to the lunacies of monetarism. I wish him well, but he has a job on his hands.
§ 12.9 am
§ Mr. David Gilroy Bevan (Birmingham, Yardley)
I am discarding notes in an effort to speed the proceedings. I am tempted to follow the hon. Member for Warley, East (Mr. Faulds) on the tourist thesis, but if I did that I would be tempted to persuade hon. Members to go not to the delights of Smethwick but to the older and more historic climes of Yardley where arrows have been sharpened along the base of the church.
We are talking mainly about industrial matters. I add my tribute to the excellent maiden speeches that have been made this evening by my hon. Friends the Members for Staffordshire, South-East (Mr. Lightbown) and for Cannock and Burntwood (Mr. Howarth) and by the hon. Member for Birmingham, Erdington (Mr. Corbett), who 902 has returned to the Chamber, which is more than the hon. Member for Birmingham, Perry Barr (Mr. Rooker) has done. He was unkind enough during the penultimate debate in a spate of industrial debates on the west midlands, to say that I would not be in this Chamber to take part in the next debate on this subject. I am here. I congratulate all the maiden speakers.
§ Mr. Faulds
On a point of order, Mr. Deputy Speaker. The hon. Gentleman is standing in the Gangway, which is out of order. Will he step back into his proper place?
§ Mr. Bevan
I do not know whether I stand corrected by you, Mr. Deputy Speaker, but the hon. Member for Warley, East sits at the top of the Gangway on every occasion. I shall try to keep within my place. However, I must not be deterred from saying some of the things that I feel are salient to this debate.
There is an abundance of skilled workers in Yardley and in the constituency of my hon. Friend the Member for Birmingham, Northfield (Mr. King), who made an excellent first speech. He referred to the policies of the Government and their predecessors, whose representatives have ignored one of the real factors which resulted in the decimation of the west midlands. For over 38 years the leeches sucked the blood out of the iron heart of England and made that area anaemic. The taxpayers' money was spent in every area, except the west midlands. The policies of successive Governments, mainly Labour Governments, created that condition.
One newspaper has been unkind enough to say that these debates are a waste of time. I should be inclined to agree if they were just hot air. Debates should encourage the Government to do something.
I pay tribute to my hon. Friend the Member for Coventry, South-West (Mr. Butcher), the Minister with responsibility for the west midlands, for the excellent initiatives that he has taken in the short time that he has been doing this job. Having known him for some years, I know the dedication with which he has tackled this problem. I know that he will attempt to see that everything necessary is done.
It is academic to argue whether we receive the same money under sections 7 or 8 of the Industrial Act as other areas. What matters is that we receive money to regain parity with areas which were once weak and are now strong and return to a position of pre-eminence and wealth in the west midlands.
It is nonsense to suggest opening science parks in green belt areas, although we obviously need more. I suggest using the numerous vacant factories in Yardley. Wilmot Breedens has now been razed to the ground. It is believed that the area will be denuded further with the loss of Lucas Girling in Kings row, Tyseley. That area, connected by railways, roads and canals to places such as the national exhibition centre, can provide factory sites. I hope that my hon. Friend will study the necessity to refurbish and reequip such factories. It is essential that he should use his influence to have the Rover works reopened for the economic well-being of the west midlands. They are just over the border of my constituency and employed many of my constituents.
Although numerous claims are made that the service industries are taking up some of the slack, they will not 903 provide the 460,000 jobs resulting from the youth training scheme or the 130,000 jobs from the community programme. Only manufacturing industry will do that.
Almost the only point with which I agreed in the speech of the hon. Member for Erdington was that the traditional heavy industrial and metal-bashing skills of the west midlands must be retained.
There must be a capital programme As my hon. Friend the Member for Solihull (Mr. Taylor) and I said some years ago, the motorway infrastructure must be finished, the railways must be modernised and the crumbling sewers, put in at the instigation of Clamberlain and his predecessors about 120 years ago, must be replaced. After all that has been done, will my hon. Friend persuade his ministerial colleagues at the Treasury to study the banking sector to see whether the schemes designed to help small businesses, which have increased from 86 to about 103, are progressing as they should. I suggest that the 80 per cent. guarantees being given by the Government are not being applied by all banks in the same way. Some of the clearing banks are good; others which are poor and appear low in the star rating, do not wish to improve. Even though the Government are prepared to guarantee the money, those banks are not implementing the schemes. Therefore, entrepreneurial skills in small businesses are not being exploited to the maximum. Some ban managers do not want the bother of filling in forms and making returns to the Government.
Will the Minister consider all these matters so that he can make an impact—as I am sure he will—in ensuring that prosperity returns to the west midlands?
§ Mr. Hal Miller (Bromsgrove)
I should like to try to bring together some of the main themes of the debate for the benefit of the Front Bench spokesmen, who are about to reply to the debate.
First, it is necessary to nail the lie that all the problems have occurred since the election of a Conservative Government in 1979. The problems of the region and its dependence upon the motor industry were set out in reports of the economic planning council dating back some 20 years. It is therefore idle to suppose that this trouble has occurred suddenly. It is equally idle to deny that the position in the west midlands is serious. If I may recap: there are about 400,000 people out of work—about 1.2 times the national average—and about 43 per cent. of unemployed males have been unemployed for over a year. Disposable personal income is about 10 per cent. lower than in the rest of the country. I do not need to go on to emphasise the serious problems of which I know my hon. Friend is well seized.
We have to consider the remedies that we should be urging on the Government. I listened to the hon. Member for Walsall, North (Mr. Winnick). His suggestion of a reduction in the exchange rate was exposed by my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) in a biting maiden speech. His idea of import controls was exposed by the hon. Member for Warley, East (Mr. Faulds), who pointed out that the newly developed countries were engaged in motor manufacture. His idea about exchange controls was exposed by the hon. Member for Birmingham, Erdington (Mr. Corbett), whose speech lacked reference to animals in a e west midlands —I know of his concern for animals in politics. The idea that the exchange flows have contributed to 904 unemployment is badly misconceived, because factories such as GKN and Lucas had to invest abroad, where the modern car was being developed in Spain and America, to preserve design capacity and employment here. We can disregard the remedies offered by the hon. Member for Walsall, North.
We should be considering other remedies. This debate is a continuation of the debate on Friday on regional industrial policy, in which west midlands Members forbore to take part, knowing that we had this opportunity this evening. Hon. Members representing constituencies in the north spoke of the themes to which we should be turning our minds. We want to stand on our own feet and we want the ability to compete, free from the distortions which the Government's regional industrial policies have introduced.
That theme was echoed by hon. Members from Yorkshire, Northumberland, Lancashire, Cumbria, and now from all over the west midlands. If our Government believe in market forces, why are we still lumbered with an out-of-date regional industrial policy which has been proved by the Department's analysis not to answer the real problems of regional disadvantage and deprivation?
I recognise that, as my right hon. and learned Friend the Member for Hexham (Mr. Rippon) said on Friday, the Government must have a regional aspect to all their policies, not just their industrial policy. On the ground of the figures that I have given, the west midlands must qualify for consideration in all Government policies. We wish to see industrial policy conducted on industrial, not geographical, lines. We recognise that there are regional disadvantages, but we would prefer to see them corrected through programmes under the auspices of the Department of Environment, such as derelict land clearance, the inner urban area partnershp programmes, which we hope will attract the EC funds for which we were told in March application was being made.
I refer my hon. Friend the Minister to the Department of the Environment's scheme approved for the 1983–84 programmes, under which we have some £5.7 million approved for acquisition and reclamation of land, as opposed to some £20 million for the north-west and a total of £32 million for the whole country. This is the route that we should be pursuing—not blanket policies, but paying attention to the black spots and underdevelopment.
We are not just crying hurt in the west midlands. We are beginning to take a serious and positive view of our problems. The national exhibition centre to which my hon. Friend the Member for Birmingham, Northfield, (Mr. King) referred is an example. There is also the setting up of the west midlands industrial development agency, which is the first industrial development agency to be privately led. We are not asking for Government funds and we are not looking for a public sector lead. We are doing something for ourselves. I hope that my hon. Friend the Minister will respond to the lead given by private firms and to the needs of the region.
I realise that to review and revise the Government's entire regional policy is a large undertaking and that to bring about the turnround that we wish to see will necessarily take a considerable time. I hope that the Minister will tell us that we may expect a White Paper in the autumn and a further period of consultation, during which all hon. Members will no doubt wish to state their views.
905 We look to the Minister for positive Government action to remedy our disadvantages, perhap by pre-production schemes. I believe that that is why his office was set up initially. I have often expressed my anxiety about the lack of take-up of support for innovation programmes in the west midlands. The Government must have a much more active public purchasing policy and greater emphasis is needed on research and development.
I urge the Minister to recognise the serious situation in the west midlands and the need for a change in Government regional industrial policy for which all sections of the country and not just the west midlands have called. That policy must be re-thought. While that is happening, we need some interim assistance to enable us to respond to the initiatives which the west midlands is taking.
§ Mr. Peter Archer (Warley, West)
If the timetable which you, Mr. Deputy Speaker, announced a few moments ago has slipped somewhat, that is probably well worth while. We have heard several interesting and helpful contributions to the debate, which has been characterised by two maiden speeches which were a great pleasure to hear. They were on a subject with which maiden speeches should be concerned—the future of the communities which the hon. Members represent. The hon. Member for Staffordshire, South-East (Mr. Lightbown) contributed his own experience to the debate. I do not necessarily share his recollection of the entire history of the matters that he related, but we all share his concern for a better future for our region.
The hon. Member for Cannock and Burntwood (Mr. Howarth), in an elegant contribution, expressed predict-able sentiments, if he will forgive my saying so. If he maintains the purity of his doctrinal approach, I predict a rosy future for him in the Government. I do not propose to enter into a controversy on everything that he said. He said that it was no use making goods unless people were prepared to buy them. That is perfectly true. Frequently the question is not whether people are prepared to buy the goods but whether they have the money to buy them. That is possibly what lies between our respective philosophies.
The hon. Member for Birmingham, Northfield (Mr. King), who so ably introduced the debate — I congratulate him on obtaining this opportunity — said that it was the third debate on the subject in recent times. I can enlighten him. To my recollection, it is the sixth debate in the past two or three years. The first was on 20 June 1980. At that time we referred to the problems of west midlands industries and asked the Government for help. The Government said that the problems of the west midlands did not all originate in 1979. That has been said more than once tonight, especially by the hon. Member for Bromsgrove (Mr. Miller). The Government said that the problems originated from factors over which the Government had no control. Wishing to be realistic and fair, we agreed that there were some factors that could not be laid solely at the door of the Government.
I suspect that we were rather fairer than the Conservatives were when they were in Opposition. In 1979, when unemployment was 5.2 per cent. in the west midlands and 5.3 per cent. in the country as a whole, I recall an election poster portraying what purported to be 906 a dole queue—we discovered afterwards that it was in fact the Hendon, North Young Conservatives lined up for the cameras—with the legend, "Labour Isn't Working". In other words, when the Conservatives were in Opposition the clear implication was that when there is unemployment the Government are to blame. We try to be fairer than that and we acknowledge that some factors for which the Government are not responsible have helped to bring about unemployment.
One such factor has been mentioned several times in the debate. In the 1960s, the problems of the west midlands were those of an overheated economy. All the skilled workers were in jobs and there was a shortage of skilled workers. So much land was occupied by the industrial processes that there was a shortage of land. Successive Governments therefore encouraged industry to open in other regions and the system of industrial development certificates was introduced. I do not complain about that. I think that it probably made sense at the time. Nevertheless, it meant that new industries, including all the products that have recently been developed, went to other areas and the west midlands remained the region of older industries nesting on a narrow industrial base of vehicle building and metal working.
The west midlands is now paying the penalty for having been the birthplace of engineering. I accept the comment of my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) that management in those days did not always respond appropriately. As the hon. Member for Rugby and Kenilworth (Mr. Pawsey) reminded us, however, the collapse has come in the past four years and there was every reason for the Government to give encouragement to those industries which sought to introduce new technology.
In the debate in June 1980 I referred to BSR in my constituency. It was the great success story of the decade, with superb management, modern technology and perfect co-operation from the work force and the unions. The firm could not be faulted. When the Government were looking for a success story for the Prime Minister to visit, they chose BSR. I asked the Government then to help BSR in what we hoped were temporary difficulties, and I took a deputation to the Department. Since that debate, two BSR factories in my constituency have closed. Jobs have gone, hopes have gone, pay packets which could have led to further employment in consumer goods have gone, and with them has gone a part of Britain's expertise and technology.
Another factor mentioned today which, it is suggested, cannot be laid at the Government's door is the world recession. The hon. Member for Rugby and Kenilworth also mentioned this. Certainly, there has been a recession in the world— largely, I suspect, because many other Government have been pursuing the same monetarist policies as the British Government. But the United Kingdom has been losing its share of world trade. Unemployment here has been higher then in any other industrial country except Spain, and it has been increasing faster than in any other industrial country including Spain —at a time when we have the enormous advantage of North sea oil coming onstream.
As we have already been reminded, the consequence of dismantling exchange controls has been that British money is being invested in jobs abroad. In 1982 private 907 investment overseas rose to £10,000 million. With great respect to the hon. Member for Bromsgrove, that figure is utterly unacceptable.
As my hon. Friend the Member for Warley, East (Mr. Faulds) pointed out in an intervention, for the frst time since the industrial revolution the United Kingdom is importing more manufactured goods ban it is exporting. It cannot be alleged that all that is to do with the international recession and outside the Government's control.
It has also been said that new technology means that machines now do work that was once done by human beings so that unemployment is inevitable. It is true that machines are removing the need for drudgery, but that should be a blessing, not a problem. Perhaps within the next 20 years human needs will be met with very little human labour, but that is very different from the present problem. People are now eating out their hearts for work while human needs are not being met. Families come to me asking for more attractive housing or for repairs to be done to their homes while the construction industry is unemployed. Areas in my constituency are dreading the text storm because their drainage is inadequate. As the hon. Member for Birmingham, Yardley (Mr. Bevan) said, those who could be laying those drains are in frustrating idleness. Someone pointed to the need for a road to the east coast ports. The people who should be building it are idle. This is nothing to do with the new technology. That is a failure to match the need to the human resources available to meet it.
As for rates, no council wishes to impose an additional burden on industry at present because councils of all political complexions are conscious of the result on jobs. Changing the method of raising finance will not alter the necessity to finance local government services. The problem that local councils must face is that it is precisely at a time of high unemployment that local services are most urgently needed. That is when the pressure on families impose the greatest burden on the social services. That is when stress illnesses lead to the greatest need for health and domiciliary services. That is when time hangs most heavily on people's needs and, so, provision for leisure is necessary.
Local councils must preserve such balance as they can between imposing tax burdens on the domestic services and cutting services at the time of greatest hardship.
Ministers may be aware that the west midlands district councils of both political complexions have submitted to the Secretary of State for the Environment a memorandum pointing out that the block grant formula operates to the disadvantage of west midlands authorities, at least those in the conurbation, because the rateable values were fixed in 1973 on evidence collected in 1972 At that time it was an area of high prosperity with substantial resources. People were competing to obtain industrial sites, and so values were high. The fault about rates lies not with the local councils, but the solution lies with the Secretary of State, and I hope that the Under-Secretary will bring this matter to the attention of his right hon. Friend.
Here we are four years after that debate in June 1980, and five debates later, and many of those great companies that carried names such as Yardley, Cradley Heath, Smethwick, Oldbury, Walsall, and Birmingham are now gone. They carried those names around the world, wherever people talked about engineering, lifting gear, boilers or machine tools.
908 Among my earliest recollections as a child is living beneath the walls of the Patent Shaft steel works in the constituency of my hon. Friend the Member for West Bromwich, West (Miss Boothroyd). Perhaps my earliest recollection is the glow that lit up the sky across half the town when the furnaces were tapped. I drove past it yesterday, and it has gone as completely as though it had never existed. The whole area where generations of midlanders, including many of my relatives, earned their living and apprenticed their sons, has gone as far as the eye can see.
Along with it has come all the human misery about which my hon. Friends spoke so movingly — among school leavers who were beginning what they hoped would be their working lives but who now feel unwanted and are simply taking part in cosmetic projects; among the middle aged in their mid-50s, with little prospect of ever working again; and among ethnic minorities who find themselves at one and the same time unemployed and blamed for taking the jobs that ought to go to others.
One of the things that the Government could do to alleviate this misery is the 12-month rule. It made perfectly good sense at one period that when a man had been unemployed for 12 months, it was time he found another job and, therefore, his unemployment pay should cease. Now he has no opportunity of finding another job. After 12 months, he is driven to seek supplementary benefit. If he and his wife have managed to save something for their old age, that must evaporate before they are entitled to any money. All the misery consequent upon means-tested benefits is heaped on top of the trauma of losing one's job in the first place.
Now that 12 months have elapsed, a close constituent friend has been told that he cannot have supplementary benefit because he is in receipt of a service pension awarded because of wounds that he received in the second world war.
There has been no shortage of suggestions as to how the Government can help to alleviate the problems of the west midlands. The hon. Member for Northfield spoke of the unfair competition from Spain. We do not seek protectionism, but simply the insistence that if there is to be competition all horses shall carry the same weight. Many of the industries that compete with the west midlands are enjoying cheap fuel, tax concessions and a whole range of Government assistance that is being denied to industry in the west midlands. The hon. Member for Northfield mentioned the establishment of a free port at Birmingham airport, and I support that.
My hon. Friend the Member for Coventry, North-East (Mr. Park) mentioned reduction of interest rates to make investment possible. My hon. Friends the Members for Walsall, North (Mr. Winnick) and Warley, East mentioned the restoration of exchange controls to stop the haemorrhage abroad of British capital. My hon. Friend the Member for Erdington spoke of a partnership of public and private money with public and private direction to provide investment in manufacturing, especially in vehicle components and machine tools. My hon. Friend the Member for Warley, East mentioned investment in the new advanced industries and the use of tourist attractions in the west midlands. The hon. Member for Rugby and Kenilworth mentioned the removal of car tax.
We cannot stimulate industry in the west midlands in isolation. I am asking the Government to set the unemployed to work, meeting the needs of human beings 909 by building houses, laying sewers and making roads. The money in their pockets will provide jobs for others. That may be said to be inflationary, but inflation arises when the money is available to spend but the goods are not there to be bought. And the reason why the goods are not available is that the money is not there to spend. If the money were available to spend, the goods would be available. That is not inflationary. That is what the west midlands enterprise board is seeking to achieve — to bring together the need, those who are awaiting an opportunity to work to meet it and the funds waiting to be invested to enable that to happen.
Had there been time, I would have mentioned to the Minister the problems arising from liquidations. A number of companies are in difficulties because their customers have been liquidated. We are still awaiting Government action on the Cork report. I shall return to that matter on another occasion.
I do not believe that, notwithstanding the CBI newsletter, industrialists in the west midlands believe that we are on the verge of an upturn. They have heard Ministers say that too often. Until they see other signs of recovery, and while they are hearing the comments of the west midlands chamber of commerce, they will not begin to invest, take on labour, support training, offer apprenticeships or stock up with components. It is a matter of confidence. The Government must begin to alleviate the total despair in the west midlands. The first job for the Minister will be to restore confidence, and I wish him well.
§ The Under-Secretary of State for Trade and Industry (Mr. John Butcher)
This has been a long and exceedingly interesting debate. It has been graced with two maiden speeches and also with the beginnings of unanimity in areas where we perceive there to be certain difficulties.
Running through the debate I detected a plea for equality of treatment for the west midlands vis-a-vis other parts of the country and our international competitors. I also detected, not least in the maiden speeches, a plea for fairness, but not favours for the west midlands. As west midlanders, we are prepared to cope with fare and free competition, domestically and internationally. We are agreed that nothing whatsoever is wrong with metal bashing or the engineering industry, provided that we are good at those skills; provided that they are in the genes and the chromosomes of the work force. They certainly are in the west midlands.
We are agreed that over three or four decades we gradually produced an economy which developed structural weaknesses in the locality which we hardly noticed until it was almost—I use that word advisedly—too late. We are agreed that whatever policies we deploy we should use them to help existing companies in established industries to re-equip and, if necessary to move up market. We are agreed that we should help nurture the newer industries. I refer to industries in terms of industrial and service activity. We are agreed that we should help with inward investment into our region so that we can assist whatever trends there are to broaden an over-narrow industrial base. The tactics are, of course, a matter for discussion and are contentious.
910 We intend to deploy to the best effect a number of section 8 measures in the west midlands—section 8 in its full blown form or in the form of support for innovation or new products and processes, and in the form of specific schemes to encourage new technologies such as robotics and microbiological sciences. I am delighted to report that we are developing state of the art technology in carbon fibres. We are not doing too badly in robotics, whether in Telford or in Rugby. We are not doing too badly—we are doing very well indeed—in the development of fibre optics technology.
Let us agree that we have things of which to be proud in our region. Let us agree, as the hon. Member for Coventry, North-East (Mr. Park) said, that there is a danger of talking our region down. We accept that times have been tough, and still are for many employers and non-employees, but let us dedicate ourselves to raising morale and doing whatever we can to increase confidence so that we have the base and morale from which we can proceed.
My hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) observed with eloquence the courtesies expected of a maiden speaker. I visited his constituency recently and helped him to open the Expo '83 exhibition. I saw there a fine example of a community deciding to help itself and to use whatever help there is in the locality to the best effect. My hon. Friend promised me a progress report on that endeavour and I look forward to receiving it. My hon. Friend echoed our theme—fair trade, not favours.
My hon. Friend the Member for Staffordshire, South-East (Mr. Lightbown) also made his maiden speech. I congratulate him on the common sense and conviction with which he deployed his arguments. He was right, as were other hon. Friends, about industrial development certificates. He was right also, as was my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey), to say that we made errors in the past in lengthening the production and supply lines of many enterprises. I, too, have reason to remember ruefully the lessons of Speke and Linwood.
We were reminded yet again in the speech of my hon. Friend the Member for Staffordshire, South-East that we want a fair crack of the whip—no more and no less.
My hon. Friend the Member for Rugby and Kenilworth showed us his understanding of the phenomenon of what he called "Pawsey's law". I have no doubt that my right hon. and hon. Friends who have a habit of curling up in bed with Hansard will read my hon. Friend's remarks.
The hon. Member for Birmingham, Erdington (Mr. Corbett), who is a professional and seasoned campaigner, albeit after a period of temporary exile from the House, said that the economy was about people. He began to lead us into a rather tenuous argument by juxtaposing the words "the economy is about people, not productivity and not profit". The hon. Gentleman will forgive me if I take issue with him on that. If people maximise their individual talents, they become productive and, if the companies concerned have anything about them, make profits. So perhaps we found another form of agreement tonight.
Will the hon. Gentleman join me, in the few days that we have before August arrives, in asking his constituents, midlanders and indeed the country to consider what they will be doing when they buy their new cars with the new registration numbers in August. They should think seriously if they are tempted to buy a foreign car on its 911 merits, because there are now many British cars on which they may have turned their backs in previous years—for snob value or whatever — at which they should take another look. They should look at some of the fine cars coming out of our factories and consider the additional redundancies that will occur if they continue—it may be a newly acquired habit on the part of some consumers—to buy foreign cars.
We could debate at great length who did what to whom when their Lordships Ryder and Stokes held their tenancies—albeit temporary and not too well pursued tenancies—at British Leyland. The hon. Gentleman will recall that the period of "Big is beautiful" when the former right hon. Member for Bristol, South-East, Mr. Tony Benn, was in power, was perhaps a time when many misguided things were done.
My hon. Friend the Member for Birmingham, Yardley (Mr. Bevan) was, as ever, pugnacious. I learnt at his knee in the ward of Moseley in Birmingham and he, like me, is an adopted Brummie. We are proud of that city's endeavours. I am proud, too, of the much more ancient city of Coventry.
The hon. Member for Warley, East (Mr. Faulds) made an extraordinary and enlivening speech, but you, Mr. Deputy Speaker, are not going to allow me to tell the House why.