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Cbi

Volume 901: debated on Sunday 2 March 1975

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Q2.

asked the Prime Minister what plans he has to meet the leaders of British industry.

Q8.

I have been asked to reply.

My right hon. Friend is frequently in touch with leaders of British industry at NEDC—where the TUC and the CBI are represented—and on other occasions. Meetings are arranged as necessary.

Is my right hon, Friend aware that in the last 10 years London has lost 500,000 manufacturing jobs, that in my constituency of Edmonton the unemployment rate has doubled in the past year, and that there are parts of London where the unemployment rate is higher than it is in some development areas? When my right hon. Friend next meets the leaders of industry, will he propose, as a matter of urgency, that discussions take place between the Government, industry, the Greater London Council and the trade unions, to see what can be done to tackle the increasing problem of losing manufacturing jobs from London and give it the highest priority?

I am well aware that there are many parts of the country which are not assisted areas but in which the rate of unemployment is higher than in some assisted areas. That is one reason why, last September, my right hon. Friend and I extended the temporary employment subsidy for assisted areas to cover the whole country. As my hon. Friend will appreciate, it is misleading to talk about unemployment levels by constituencies, especially in London, because workers living in one part of London can and normally do find work by commuting to another part. The Greater London travel-to-work area had an unemployment rate of 3·1 per cent. in October—well below the average rate for the United Kingdom as a whole and under half the average rate for the development areas. In the light of that fact, I do not think that it would be right to take special measures to help the GLC area.

When the right hon. Gentleman and his right hon. Friend the Prime Minister meet the leaders of British industry, do they ever ask them why manufacturing industry has failed to invest over a long period? If they do, what reasons do the industrial leaders give? Is the right hon. Gentleman aware that in a recent report of the National Economic Development Office that tried to ascertain the major constraints on British manufacturing industry investment over the last 10 years, the view was put forward that the reason was not lack of finance or lack of markets but lack of continuity of Government policy, because of constant chopping and changing about? What proposals have the Government to bring continuity into industrial and economic policy?

My right hon. Friend the Prime Minister and I, and my right hon. Friends, rarely meet leaders of industry without discussing with them the problem of investment. We get varying replies about the reasons for British industry's comparative failure to invest since the war. As I pointed out in the debate in the House last week, the investment performance of our manufacturing industry has been sadly declining since the Second World War, irrespective of the rate of inflation and of the rate of return on capital. Studies done by the NEDC, which have been considered by the CBI and the TUC, suggest that the so-called stop-go policies have been no more a factor in deterring investment in this country than they have in other countries which have a better record. The question of what is required to promote and stimulate manufacturing investment is an immensely complicated one, and hon. Members on both sides of the House would be mistaken in believing that there is a single and simple answer to it.

Does my right hon. Friend recollect that the Government have said that public sector expenditure must be restrained so that the resources thus made available can be devoted for investment in the private sector? Will my right hon. Friend give an assurance to industry in London that it will receive its share of those resources which are to be made available?

I have made clear on many occasions, as has my right hon. Friend, that the Government intend to give priority to measures that will stimulate investment and improve performance in British manufacturing industry as a whole, and that this will require our giving a lower priority to other areas of public expenditure. I hope that my hon. Friend will support us.

Has the right hon. Gentleman noted the strong expression of belief by the leaders of British industry that the contents of the Queen's Speech did not honour the undertakings given to them at the recent Chequers conference? In view of the grave financial, economic and unemployment situation in this country, what proposals have the Government to restore confidence to British industry?

Of course I have noticed the statements made by Sir Ralph Bateman and those who, no less than the hon. Gentleman, have their constituencies. I also notice that in his speech yesterday Sir Ralph pointed out that next year will be a critical year for Britain. He believes that it could be the year in which we set our economy on that course which it has failed to follow since the Second World War, namely, a steady improvement in our relative performance compared with that of other parts of the world. I hope that we shall have the support of the hon. Gentleman and his hon. Friends no less than that of both sides of British industry in ensuring that next year is indeed a turning point in that sense.

Is my right hon. Friend aware that the leaders of British industry and many other people in industry are concerned about the point of re-entry after the current wage policy? Are the Government plotting a recommended course? When shall we have a statement about it in the new year?

The Government have made clear on many occasions that they believe it would be a great mistake to win one battle and then lose the war. It will, therefore, be necessary to continue an incomes policy following the end of the current wage round. My right hon. Friends and I will be discussing this policy with both sides of the House and industry in the new year. We are confident of reaching agreement on an adequate policy in good time before the next wage round begins.

Will the right hon. Gentleman explain to the leaders of British industry and the House how it can conceivably help confidence in investment in the future for the Government to proceed with the measures they are taking this afternoon for the nationalisation of the shipbuilding and aviation industry?

The right hon. Gentleman, whose integrity we respect, would not believe that it would advance the reputation of any British Government to betray the promise on which they fought and won the last General Election, and we have no intention of doing so.