Mr. Michael Foot (Ebbw Vale)
I beg to move, to leave out from “House” to the end of the Question and to add instead thereof:
“deploring both the massive rise in unemployment and the massive fall in industrial output, calls upon the Government to abandon its economic and monetary policies which are crippling British industry and inflicting great and lasting damage to the whole economy.”
The Prime Minister began her speech with a reference to what she called “common ground.” I do not think that [column 424]there was very much in her speech on which there could be common ground, unless we accept her compliments about some of the past schemes that we introduced, and which she has taken over, to deal with some of our unemployment problems. Some of us remember the fulsome tributes that she paid to the schemes during the days of the general election, saying that if she had the chance she would carry forward our schemes to assist employment. In fact, she went from one end of the country to the other deriding those schemes as not providing real jobs.
It is common ground that 800,000 people—the right hon. Lady's figure—are in jobs because of the schemes that we introduced, and which the Government have carried forward. We are grateful for that piece of common ground. I wonder how the right hon. Lady distinguishes what she describes as the tired old formulae of the Labour Party. Hardly a week passes when a Minister does not tell the House that he intends to spend £1 billion on a tired old formula—one day it is British Leyland, and the next day, presumably, it will be British Steel, not that that scheme is necessarily the one of which we approve.
Some Conservative Members like to hold to the propositions that they made during the election campaign. The right hon. Lady was candid enough to admit that a great deal of employment is sustained because the Government have voted money to sustain what the right hon. Lady described as the tired old formulae of the Labour Party. We propose that, with the highly critical state in which Britain finds itself, those formulae should be carried further.
The origin of the debate was our constant demands that the unemployment position throughout the country—not merely in the old places of heavy unemployment, but in the Midlands, the South-West and London—was so serious that we should have a major debate on the subject every month. We claim that, as the Government have played a major part in the creation of these appalling unemployment figures, they should provide the time for a debate every month on the situation throughout the country. I trust that the Government will respond to that demand, because these unemployment figures are the worst since the 1930s and almost the worst in the Western world as a whole, as I shall illustrate in a moment, despite all the right hon. Lady's denials.
May I turn to what the right hon. Lady described as the centre-piece of the Government's policy—their fight against inflation. I am certainly prepared to acknowledge that that is the centre-piece of the right hon. Lady's policy. I am sure she is passionately sincere in her desire to bring down the rate of inflation. I believe also that she is single-minded almost—it is a criticism in this sense—in thinking that that is pretty well the only question with which they have to deal in economic affairs. I am all in favour of bringing down the rate of inflation, because a rate of inflation of 15 per cent. such as we have today inflicts great injury on the economy and great injustice on individuals, and this would be the case even if the rate were lower. So we in the Labour Party are strongly in favour of the fight against inflation.
The right hon. Lady must acknowledge that she wavered at one moment. If the most passionate determination of her policy right from May 1979 when she came into power has been to fight inflation, she has not been very successful. Although I do not dispute for a second that she is sincere in her claims today and [column 425]throughout the country that that is the centre-piece of her policy, as she described it this afternoon, there was one moment when she and her Government wavered with very serious consequences.
There are many on the Government side of the House who have underlined the fact that that was the moment when she and the Chancellor of the Exchequer introduced that first Budget. I wonder whether there is anybody on the Government side of the House, including the right hon. Lady, who thinks that that Budget was a great anti-inflation Budget. I do not suppose there is. Of course, it was not only the raising of the VAT rate and the departure from the single intention of fighting inflation, but it was all the consequences that it had throughout the economy in wage settlements. There is not one person on that side of the House who would dispute the argument that the increase in VAT and the other goods that were heavily charged had an effect on wage settlements and on the inflation rate.
So there was one moment—one great, critical moment—when they wavered, and they wavered because they thought that it was more important to fulfil their election promises to one small section of the community than it was to fulfil them to the rest of the community. So I say to the right hon. Lady that she can make the claim, and I do not dispute that what she intends——
Mr. John Townend (Bridlington)
I will give way in a few seconds. I do not dispute that that is what she wishes to pursue, but I say to her that, if she pursues the proposals to reduce inflation by the means she has been adopting up to now, she may succeed; the inflation rate may eventually come down to the figure it was when she took office. It is quite likely that she will get it down further still. If she does it by the means she is presently employing, the results for British industry and British employment will be catastrophic.
Does the right hon. Gentleman accept that the awards of the Clegg Commission which this Government inherited cost them £1.6 billion? As he has claimed that it was the Government's first Budget that caused wage inflation, would he like to put a figure on that?
I was in favour of our Government accepting the Clegg Commission report, and the right hon. Lady gave her pledge during the election. She should not try to wriggle out of her responsibility now. It was perfectly open to the right hon. Lady, if she wished, during that election to say that she would not implement it. But she made her own choice and she should not pretend that the responsibility for these matters rests with anybody but herself.
Will the right hon. Gentleman please answer the point I made? He claimed that the Government's first Budget increased wage claims substantially. I quoted a figure of £1.6 billion as the cost of Clegg. Would he like to put a figure on his claim?
I was in favour of that report, and I do not try to run away from it, as the right hon. Lady does. She runs away from it; I accept it. I think it was right to accept the Clegg Commission report. I think it was fair to the low-paid workers who were dealt with under that report. One [column 426]of the many shameful actions that this Government have taken has been to run away from their commitments to low-paid workers. Certainly when we get power again we will take measures to try to assist low-paid workers.
I have given way to the hon. Gentleman twice. If the Government are going to fight inflation successfully over a long period they have to have a policy for protecting low-paid workers as well as one of making big handouts to the high taxpayers.
The Secretary of State for Employment (Mr. James Prior):
Would the right hon. Gentleman perhaps go on to say why it was that after five years of Labour Government there were those low-paid workers who had to have the increase that Clegg awarded?
I should have thought that the right hon. Gentleman would understand the point. The problem of the low-paid workers cannot be solved in a single Parliament. We made considerable moves in that direction, however, which were not very well—[Hon. Members: “Oh” .]—Yes. I remember these matters vividly because the £6 across the board, which I carried through the House as Secretary of State for Employment, with precious little assistance from the Tory side of the House, was a plan to assist the low-paid, and it is along those lines that we will have to deal with the problem in the future. No policy for fighting inflation can be successful over a period unless it has written into it proper protections for the low-paid; perhaps our experience confirms this. It is true that we searched for a solution and did not secure it in the way that we wished, but we believe, in contrast——
Mr. Ian Lang (Galloway)
No, I shall not give way. I have given way three times already.
I turn to another section of the right hon. Lady's speech. This is indeed one of her principal arguments, against both the plan for growth and against the policy which the TUC has put to her. I suppose that it is an argument, too, against the much less formidable or fruitful policy that has been put to her by the TUC, but it is also her argument, reiterated today, for doing nothing, in effect, about the general situation. The right hon. Lady says, in effect, that reflation equals inflation and that it is not possible to distinguish between the two. That is what she said in the television programme on Sunday. She says that reflation equals inflation equals unemployment. She says that the cause of unemployment in recent times has been almost entirely the high inflation rate.
The right hon. Lady's central argument is that any attempt to solve our problems by a fresh round of reflation—call it reflation or inflation, whichever one wishes—will produce greater unemployment. The right hon. Lady had the temerity to say that that is based on experience. It is not based on the experience of the 1920s and 1930s. I suppose that in those years the economics of monetarism were working. Indeed, they were working all too well. In those years—soon after 1921 until 1939—there was no great inflation. However, there was mass unemployment. It could not have been inflation or reflation that caused the mass unemploymentof the 1920s and 1930s. [column 427]
The right hon. Lady treated the post-war period in the most extraordinary historical fashion. I shall come to exactly what she said. From 1945 until 1968—I know that the right hon. Lady said 1955, and I shall not forget that or let her forget it—there were about 18 different attempts by different Governments to reflate the economy. Throughout that period unemployment did not rise above 2 per cent. or 2½ per cent. During the period when Keynesian policies were being applied it would be difficult for anyone to say that the reflation or inflation was the cause of unemployment.
One of the right hon. Lady's extraordinary achievements is that she has made the era of “stop-go” sound like the golden age of plenty. That age must be regarded as a great improvement on what she has been doing. Of course, we are glad to have the presence of the right hon. Member for Brighton, Pavilion (Mr. Amery), who is looking at me so earnestly, but we would like to see the right hon. Member for Sidcup (Mr. Heath) in his place.
The right hon. Lady's condemnation of the post of war period condemns the entire period of the Government of the right hon. Member for Sidcup. Indeed, it goes back futher than that. The right hon. Lady spoke of 25 years. That takes us back to 1955 and takes in the Governments of Sir Anthony Eden, Mr. Harold Macmillan, Sir Alec Douglas Home, the right hon. Member for Sidcup and all the rest of them. There were about four or five elections during that period, including the ones that the right hon. Lady fought. I wonder what she said then. Of course, the right hon. Lady's 25 years takes in the “You never had it so good” era. We are now told that the whole of that period is to be condemned. I know that there are some Conservative Members who hold that view, but they are a small and diminishing band.
The right hon. Lady likes to claim that she is very practical by nature, but she never learns from experience. That is the trouble with her. She tries to prevent her companions from learning from experience. She does not learn from the experience of the 1920s, the 1930s, the 1940s, the 1950s, or the rest. Far from saying that the proof of the pudding is in the eating, the right hon. Lady says that the proof of the pudding must be looked for in some old professor's cookery book. It is either Friedman's book, Hayek's book or Volcker's book. That is where she looks for her theories instead of examining the facts and what is really happening.
Mr. William Waldegrave (Bristol, West)
As the right hon. Gentleman is talking about the proofs of puddings and so forth, will he remind us which Labour Government have ever left us with less unemployment than they found?
The 1945 Labour Government took office in a period when the then Leader of the Conservative Party, Mr. Winston Churchill——
Mr. John Bruce-Gardyne (Knutsford)
Answer the question.
—said that the country was bankrupt and that the Labour Government would not be able to run the economy. However, until 1951 that Government sustained a position of well nigh full employment. If Conservative Members are trying to re-write those historical memories, they will never succeed in convincing the British people.
As well as trying to rewrite history, the right hon. Lady is doing her best—this is even more serious—to try to [column 428]persuade the country that what is happening is much less serious than is the reality. She has failed to understand the scale of the crisis and she gives occasionally, as she did again today, a too optimistic account of how we may escape.
The right hon. Lady does not seem to appreciate that output in manufacturing industry has fallen more over the past 12 months than in the great slump of 1929–31. Our industry is producing less now than it was 10 years ago. About 12,000 jobs in manufacturing are being lost every week, perhaps permanently. No other country in the West, with possibly the exception of Belgium, is losing its industry so fast. All that is happening in the sacred name of competition. In the name of competition more British industries are being wiped off the map than ever we have seen before. When we recover or when the recession ends, whenever it happens, those industries will not be there and able to compete. That is the reality of what we face.
I hope that I shall be allowed a moment to turn aside to have a word about the right hon. Member for Oswestry (Mr. Biffen), the Secretary of State for Trade. The right hon. Gentleman has always been the strongest defender of the Government's monetarist policies. That was so before he took over the job of being a one man Monopolies and Mergers Commission. He has a role that is rather peculiar for him. We are glad to know that he has been brought forward again to defend the Government this evening. I have always regarded the right hon. Gentleman's pawky imperturbability as the Government's best platform of defence. Now that he has been withdrawn to another office, I wonder what defence they have left.
I am sure that whatever post the right hon. Gentleman has, and whether he is in the Government or out of it, or half out of it, he will always seek to tell us what he believes to be the truth. In 1980 he told us, as the whole country remembers, and no one better than the right hon. Lady, that there would be three years of unparalleled austerity. He did not exactly win a bouquet from the right hon. Lady for that declaration, but that did not deter him. A few months later he was saying “At any rate my prophecy has not been invalidated” . It has not. We do not know where the right hon. Gentleman will be in three years' time, but I should think that in 1983 he will be able to make another speech on that theme and demonstrate how right he has been.
The right hon. Gentleman gave us another piece of advice a little later the same year. I recommend it to anyone who is too easily comforted by the right hon. Lady's assurances, or by those that come intermittently from the Chancellor of the Exchequer about how the recession is bottoming out. In April 1980 the right hon. Gentleman said that he feared that in politics there is all too often a disposition to be optimistic far too soon. The right hon. Gentleman's words were recurring as I listened to the right hon. Lady.
The right hon. Gentleman has spent the past few weeks examining the profitability of The Sunday Times. If he thinks that The Sunday Times is not profitable, I wonder how many other industries in Britain would be condemned on that same method of book-keeping. It would be a wide range of industries that would be knocking at his back door or the back door of the Secretary of State for Industry if the same criteria that he has applied to the “hopeless unprofitability” of The Sunday Times were to be applied to the range of British industry. We hope that the right hon. Gentleman will explain this evening how many [column 429]unprofitable industries he is determined to keep in being through this recession. We promise him that he will get much more support for that programme from the Opposition than from his own followers.
I turn to another phrase. This does not come from the right hon. Gentleman but from someone further inside No. 10, Downing Street.
“The ability of everyone here” ——
that is, people in No. 10—
“to look on the bright side never ceases to amaze me.”
I thought, on reading it, that this must be some economic report from Professor Walters. It is not at all. It is from Denis himself. It is in Private Eye. I commend it to the House.
The Prime Minister
You can do better than that, Michael FootMichael.
He does better and better each week. I can assure the right hon. Lady that every member of her Cabinet reads it—the ones who are still there, the ones who were thrown out, and the ones who will be thrown out next week. They all read it because they get advance information of how they stand in the popularity stakes. We should not be too respectable about reading it. The whole House reads it, and enjoys it; and occasionally gleams of truth come through to the House of Commons on these matters.
The right hon. Lady is, however, not so optimistic on the unemployment figures as she has been on some of these matters. I do not blame her for not being prepared to say how high unemployment is to go and how long we are to continue with the policies that help to cause it. The right hon. Lady dismissed the document of the TUC. I do not believe that it is possible to dispute what the TUC says about the scale and nature of the unemployment problem that faces us.
I am not in favour of throwing around figures of 3 million or 4 million. The figures that already exist are savage and severe enough. To those figures, on the most conservative estimates, have to be added a great number of others, as shown in the TUC report. There is probably a total of those who do not register, based on past findings and surveys, that add another 500,000 or 600,000. I am not protesting about the compensation schemes. We introduced them. If the Government had not continued those schemes there would be at least another 400,000 or possibly 500,000 to add to the present total. Those sums are running out. The figures are, therefore, very high.
At yesterday's NEDC meeting in which the right hon. Lady participated, there were other figures given, apart from those of the TUC. According to the Financial Times report,
“The 5m unemployed forecast was given by Mr. Michael Shanks, chairman of the Consumer Council. … Neither the Prime Minister nor any other member of the Government team refuted the figure when it was put forward by Mr. Shanks and later repeated by Mr. Murray during his rebuttal of Mrs. Thatcher's summing-up speech” .
Perhaps the Secretary of State for Trade can make some comment. There is no doubt that according to those figures, whether or not they are an exaggeration, and what is happening from one end of the country to the other, the unemployment situation is the most serious that we have had to face in this century. It is on that basis that the House of Commons should approach it. The right hon. Lady does [column 430]not. She continues to offer us phoney figures about the situation. She gave more in the House of Commons on Tuesday this week.
One of the Prime Minister's themes is that other countries are suffering similarly to ourselves. We know that she has discovered the world recession since the general election. Even so, it is not the case, as she claimed on Tuesday, that
“The percentage increase on unemployment in Germany, Denmark and Holland between August and December rose faster than in this country in the same period.” —[Official Report, 3 February 1981; Vol. 998, c. 143]
In doing so, she was once again seeking to soothe people into imagining that we have not a special problem, piled on top of the severe unemployment problem throughot the rest of the Western world and, indeed, the rest of the world.
The four-month comparison that the Prime Minister used on Tuesday relating to West Germany, the Netherlands and Denmark was worthless since the figures for school leavers come on to the register at different times in different countries. If, however, she is interested, on the seasonally adjusted basis of figures provided by the statistical office of the European Community, unemployment in the four months from August to December 1980 rose faster in Britain, with an increase of 23.6 per cent., than in Denmark, 22 per cent., the Netherlands, 21 per cent., and West Germany, 14.6 per cent.
Unemployment in West Germany rose 26.2 per cent. between January 1980 and January 1981 while in Britain it rose by 67.2 per cent.—two and a half times as fast on a seasonally adjusted basis. Last year the increase in unemployment in the United Kingdom was the highest of any EEC country at 63.3 per cent. In the face of those figures, it is monstrous that the right hon. Lady should treat these matters in the way she does in the House of Commons. The scale of unemployment is far greater than she has been prepared to acknowledge to the House or to the country.
The scale of mass unemployment which now afflicts this country, which the Prime Minister has not the wisdom or the imagination to acknowledge, can corrode and embitter this nation's national life for months and years ahead. It can, in the process, cast away the greatest of the national economic assets that we possess at this period in our history. In the last debate, when we discussed some of these matters, I quoted a remark, which still rings in my mind, by Sir Michael Edwardes about our use of North Sea oil when he said:
“If they can't find a way of living with North Sea oil, I say leave the bloody stuff in the ground” .
The right hon. Lady presides over a Government responsible for wasting our greatest resource, North Sea oil. During the period of the Labour Government, we presented to the House of Commons for discussion and debate, and for national debate, proposals on how best our country should use this precious North Sea oil which will not last for ever. We put various choices before the House and the country as to how it should be done. The country and, certainly, the Opposition will continue to press these matters.
One option that we did not include among those that we put to the House and the country—one that Mr. Len Murray says no one thought of including—is the option that the Government have chosen, namely, to use this oil, or at any rate a considerable bulk of it, for paying for mass unemployment. The right hon. Lady derides the statement [column 431]from the TUC and says that it has nothing to do with productivity and contributes nothing to saving the nation from our present ills, but I tell her that what the TUC has published this week on this subject will bear examination in years to come very much better than her speech to the House today and what she said on television on Sunday.
The TUC, on the subject of North Sea oil, says:
“if present policies are continued a tragic waste will have been inflicted on the British economy. Future generations will, and correctly, rebuke Government decision makers of the 1980s, if during a period when the United Kingdom economy did have the resources available to secure its future, those resources were misused in financing investment in other economies and in financing mass unemployment” .
That is what they have done. That is the policy for which we demand a change and for which we will bring a change when we have the power.
Mr. Cranley Onslow (Woking)
Change to what?
One good rule for us when we regain power and office will be to look at what has been happening and send out the message “Go thou and do otherwise” . Instead of increasing tax and cutting public expenditure the Government should boost spending by cutting taxes and increasing expenditure on public services. Instead on ensuring that the pound is kept at a high level, the Government should bring its value down to such a level that British manufacturers can compete in world markets. Instead of standing by while foreign producers take an increasing share of the British market, the Government should control imports. Instead of withdrawing industrial support in many of the regions, as the Government are doing, they should help industry to modernise and create jobs. Instead of reducing aid to depressed areas, the Government should subsidise the creation of jobs in those areas. Instead of pretending that what they are doing is to help with training to deal with the problem when the recession is over they should pour more money—yes, public expenditure—into ensuring that people are properly trained to meet the recovery when it comes. One example is, that the Government have removed from my constituency the skillcentre established by their predecessors.
Order. The right hon. Gentleman has made it clear that he is not giving way.
I have given way to numerous interruptions. My remarks come back to the right hon. Lady and whether she will change her policies. I do not believe that any number of Conservative Members rising to their feet, however they may seek to keep their courage up, disproves the charge that we have made increasingly through these debates in the past year that more and more of her followers and associates in her Cabinet revolt against the policy that she is seeking to impose upon them and the country.
The right hon. Lady has already won her niche in history. She is the Prime Minister of mass unemployment. If she claims that those charges should not be made against her, let me recall what she said in May 1977, when she sought to arouse some emotion on this subject. She said in response to a question in an interview
“I think it's terrible if a person who wants to work can't find a job” .
There are more than a million more unemployed today than there were then. The right hon. Lady continued: [column 432]
“You have no self-respect, you haven't got the respect of your family, if you somehow can't earn yourself a living and them a living too. Sometimes I've heard it said that Conservatives have been associated with unemployment. Well that's absolutely wrong. We'd have been drummed out of office” ——
the right hon. Lady said—
“if we'd had this level of unemployment.”
That was before the right hon. Lady started on it, when unemployment was a million or more less than it is today.
I say to the right hon. Lady and to my right hon. and hon. Friends and to those throughout the country that our business is to see that she is drummed out of office. In the House and throughout the country she is the Prime Minister of unemployment and we are determined that she shall be removed from office as soon as the nation is given the chance to speak.