Remarks as unemployment passes 2 million (“the economic strategy is absolutely right”)

Document type:	Speeches, interviews, etc.
Venue:	Mullard Radio Astonomy Observatory, Lords Bridge, Cambridge
Source:	(1) BBC Sound Archive: OUP transcript (2) Cambridge Evening News , 27 August 1980
Editorial comments:	Item (1) paraphrased. Full text, and item (2), available on CD-ROM only. Between 1005 and 1235. There is some additional material in BBC Radio News Report 1800 27 August 1980: "There is a special feature about this country which causes me particular concern. In the last year we’ve paid ourselves two [sic] per cent more for producing four per cent less. And when you take that into account, it’s not surprising that some of our goods are pricing themselves out of the markets and the Japanese and Germans are taking our business and our jobs". Reproduced by kind permission of The Cambridge Evening News .
Importance ranking:	Major
Word count:	982
Themes:	Employment, Monetary policy, Pay

(1) BBC Sound Archive: OUP transcript

BBC1 news theme played

BBC Newsreader

[BBC material paraphrased for reason of copyright:]

The number of unemployed has risen above two million. PM blames excessive pay increases and says government’s economic strategy absolutely right, but Labour leader calls two million figure indelible stain on the government’s record.

Mr. Callaghan launched attack on the government’s policy that is likely to gain momentum in months ahead. More people now out of work in Britain than at any time since 1939. Latest figures show that this month 2,001,208 are unemployed, jump of more than 100,000 on the previous month and it means that 8.3 per cent of the workforce, or about one worker in every dozen, is on the dole. Figures described by Mr Varley, shadow employment spokesman as “utterly appalling” result of government’s inhuman and wicked policies. Mr Len Murray, TUC General Secretary, said: “We need action and fast”.

But according to the Employment Secretary we’re still paying ourselves too much and that’s why, Mr Prior believes, so many jobs are being lost. And that was the theme repeated by the Prime Minister, when she ruled out any immediate changes in her government’s economic strategy:

No, the economic strategy is absolutely right.

BBC Reporter

And yet the unemployment goes up?

Well, at the moment, yes, but you see, let me take two things. First, you’ve got to fight inflation first. The best prospect for jobs in the future, good jobs, consists of getting inflation right down, you’ve never created good job prospects by creating extra inflation, so you’ve got to tackle that. Now secondly, we’ve got to deal with some of the very real problems that we’ve had in British industry for a long time. I’ve just mentioned one. We pay ourselves more for producing slightly less. The Japanese only pay themselves more for producing more, so extra pay keeps pace with extra output, so they’re very much better, in a position to compete. There’s one third thing, there aren’t any soft answers. In the end you get business, whether here or overseas, by producing the goods which are good value, which people want, which they’re prepared to pay for and which you get out and sell. And that’s the only way, and what I’m trying to do is to say to people, “there isn’t an easy answer, you’ve got to go this way”. [end p1]

BBC Reporter

But surely, Prime Minister, some kind of emergency action is needed now!

We have increased the Youth Opportunities programme by 25 per cent, because I’m particularly concerned about young people coming out of school. Actually, if you look at the figures today there are 31,000 fewer young people unemployed than there were last month, that’s one of the cheering things. Er, also you’ll find that some 260,000 people last month found new jobs, so it isn’t a static position, but in the end may I repeat, Britain will only get out of her decline when we’re producing goods at a price people can afford to pay and which we get out and sell, and which they want, and there’s no way round that. [end p2]