5.35 pm
Mr. Joel Barnett (Heywood and Royton)
I agree with right hon. Member for Brighton, Pavilion (Mr. Amery) to the extent that when the upturn comes it will not lead to re-employment. Indeed, I go further. It seems extremely unlikely that the level of growth that we shall have in the next few years will be enough even to achieve a reduction in the present levels of unemployment.
My criticism of the appalling level of unemployment is restrained to some extent by the knowledge that I do not have a simple solution to put forward to the House or to anybody else to reduce it rapidly. Nor have I heard any proposals that would do more than make a dent in the hard core of unemployment. I fear that many of the proposals now being made could, if anything, make the problems of unemployment worse rather than better.
My real concern is that the strength of genuine emotions aroused by the high level of unemployment will lead to suggestions that there is a simple solution. The Leader of the Liberal Party seemed to imply that all we had to do was to elect nice people, and that would solve the problem. I fear that it will not, because there is no solution in sight. If we promise or imply that there is a solution in sight, people's sense of outrage and disillusionment will be all the greater.
It is against that background that I welcome any measures that, however inadequately, will help to reduce the level of unemployment. I therefore welcome the measures announced by the Prime Minister this afternoon. I have no doubt that tomorrow the media will comment on whether it is a U-turn or an S-bend. I am not greatly concerned about that. The plain fact is that in economic [column 847]terms, in dealing with the nation's underlying economic problems, the measures announced today are largely irrelevant. We all know that, and I am sure that the Prime Minister knows it, although she was bound to do it.
I was, however, astonished to hear the Prime Minister say that the measures will lead to a long-term answer. They will not. The right hon. Lady must know that they will not lead to a long-term answer to our economic problems. The central economic question is: what will any measure do to solve the underlying problems that we face as a nation? The answer is that the measures announced this afternoon will do very little.
As has rightly been said, the underlying problem is our comparatively poor industrial performance. Not only over the last two years, or even the five years of the previous Labour Government, but for more than 100 years our industrial performance has been appalling, as any analysis will show. [Interruption.] Perhaps my hon. Friend the Member for York (Mr. Lyon) will be satisfied if I say that relatively speaking we have done less well than other countries.
I welcome the Prime Minister's measures to the extent that they will help to create a better educated, qualified and trained labour force. But the Prime Minister does great harm and damage by constantly giving the impression that she is sticking rigidly to a particular line of policy. We all know that between now and 1984 there will be some reflation, but it will be called by another name.
The Prime Minister appears to be insisting that if we continue on our present path and reduce the rate of inflation—I very much doubt whether we shall be able to do that—we can enjoy the fruits of our sacrifice, even assuming that the sacrifice has been fairly shared—and I do not believe that it has. To pretend that that will be the result will do great harm. Indeed, real damage will be created by anyone who pretends that we can somehow allow living standards to rise and public expenditure to increase and at the same time achieve substantial cuts in unemployment.
The fact is that all Governments, past and present, who imply such a simplistic solution and offer more than they can deliver, deserve censuring. I do not exclude critics of the Governments. All Governments, including the Labour Government for whom I share some responsibility, deserve censure not for the reasons that many of my right hon. and hon. Friends suggest—one cannot deliver manifesto commitments without the resources to go with them, and that is my criticism of the critics—but for implying that a change of this or that policy will provide more growth and higher living standards. Increased public expenditure, including increases in benefits for all and sundry, leads to enormous disappointment. We are all guilty of leading people to believe that. Indeed, such a policy could lead to the sort of explosions that we have seen all over the country. It is the disappointment of expectations for which all of us bear responsibility.
Some of my hon. Friends are still doing that. So is the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) and some of my former colleagues who are now members of the Social Democratic Party. It is all to be done with a new whiter than white policy or—as some of my hon. Friends believe—a new redder than red policy. The implication is that it is a sort of alternative [column 848]strategy—that all we have to do is to change the policy and everything will be all right. People are led to believe that, and consequently it creates enormous disillusionment.
Those who imply that delude themselves and, much worse, the millions who desperately want to believe them. It is a dangerous illusion to imagine that there is either a simple or a complex solution to this problem and that a change in policy can transform decades of decline in industrial performance. If some of my right hon. and hon. Friends deserve censure, that applies to the Government in double measure, because they not only implied but promised to deliver. Despite all the evidence, they are still promising. Today the right hon. Lady implied that all she had to do was to bring down inflation and everything would be fine.
The Prime Minister
No, I did not.
Mr. Barnett
That was the implication in what the Prime Minister said. That was the central core of her strategy.
Mr. Nigel Forman
(Carshalton) rose——
Mr. Barnett
I shall be happy to give way to the hon. Gentleman in a moment. He knows that I always give way. However, I am happy to give way immediately to the right hon. Lady.
The Prime Minister
I do not think that the right hon. Joel BarnettGentleman can have been listening. There was a whole section in the statement that said that to get down inflation was not enough. To reduce inflation is a necessary but not a sufficient condition for recovery. We went on to many other things.
Mr. Barnett
The right hon. Lady was not listening to what I said, either. The implication of everything that she said was that the central core of her strategy was to bring down inflation and consequently everything would be fine.
The Prime Minister
No.
Mr. Barnett
Yes, it was. If not, I should be grateful if she would spell it out more clearly. How will she improve real living standards and public services? How will she cut unemployment? Will she get inflation down to single figures before the general election? I regret that she is implying, without clear evidence, that once inflation is brought down, we can achieve higher economic growth. There is ample evidence to show that there are countries with higher inflation and economic growth than anything we have ever achieved. The implication is that the sole answer to our economic problems is to bring down the rate of inflation. Indeed, I go further. The right hon. Lady, in the process of trying to bring inflation down, will alienate the people she needs, and she will never achieve the answer to the problems that face the nation.
I want inflation brought down. I recognise the evil of inflation, the social problems it creates and the difficulties for industry. There are enough problems in trying to manage a company without having inflation, exchange control changes and interest rate changes. God knows, I want inflation brought down, but there is no evidence that bringing it down will, by itself, solve the underlying problems of our poor industrial performance. The Prime Minister has convinced herself, some of her more sycophantic supporters in the Cabinet and a few Members on the Conservative Benches that if she sticks rigidly and toughly to her policies all will be well. [column 849]
Fortunately, I do not believe that the Prime Minister will stick rigidly to her policies. We have democratic elections and presumably she will have to change her policies, but in the process she will alienate so many people that she will put back the time when we shall achieve the co-operation essential for even minimal success.
I have no objection to the Prime Minister and her right hon. and hon. Friends making themselves unpopular. I welcome it. But I am concerned that, because of the obvious failures of her policy, combined with the violence of the criticism of it, people will once again be led to believe that there is a simple alternative that will provide the answer. I know that there is not a simple answer. Therefore, I am concerned about the rigidity of her policies and the alternative proposals that they force. There will be changes to various shades of alternative strategies, whether they be import controls, increases in public expenditure or substantial changes in the borrowing requirement.
Those who advocated the strategies recommended by the Cambridge group recognise that the new Cambridge group also argues that what is required is a strong incomes policy, no increases in real living standards and an import control strategy. I disagree with that policy, but not with the need to recognise that if we are to achieve improvements in public services and get unemployment down there must be an incomes policy and a recognition that there is no room for improvement in net living standards across the board.
There is room for selective import controls and some increases in public expenditures, especially now, but that does not add up to a solution to the disastrous unemployment problem that we have now and are likely to face in the years ahead.
The trouble with pretending that such policies or a combination of any other policies can offer a lasting solution is that each time they fail—as has happened year after year under successive Governments—the disillusionment grows deeper and deeper. If the next Government even hints, let alone promises or implies, that their policies will bring down unemployment, and produce increases in living standards and public expenditure the disillusionment of their temporary supporters may lead to an explosion worse than anything that we have yet seen.
The tragedy is that the British, who have always been ready to face the truth, are being fed with a diet of pretence. None of us has policies that offer a long-term solution, yet we have led people to believe that there is a short-term solution far beyond anything that could be delivered. It needs to be spelt out loud and clear that, at best, our average economic growth rate, given the likely world conditions in the economic year immediately ahead and our appalling performance, will not provide resources for real improvement in our living standards for some years. Whatever growth we manage to achieve in the years ahead, it will be needed for essential public expenditure, including capital investment. If we are to achieve that, plus the vital reduction in unemployment, we need and must continue to strive for co-operation from the trade union movement that has not so far been achieved by any Government, Labour or Conservative. As I have said, with their present policies the Government have no chance of achieving it. Indeed, they will get the very reverse—and understandably. [column 850]
Without that co-operation—on the evidence of recent history, one is bound to be very pessimistic—I fear that we shall drift from disaster to disaster, with ever-increasing bitterness and disillusion against all in authority. The inflexibility of the Government and the alternatives on offer—much as I agree with some of the proposals made by my right hon. Friend the Leader of the Opposition—will do nothing to stop the dreadful consequences of long-term unemployment, for now the difficulty is that all of us face the implications of what we have done and said over many years. For my part, I have no difficulty in voting to censure the Government. They certainly deserve it—but so do all the rest of us.