Following the Post Office decision to shed 16,000 jobs over five years and Wednesday's announcement of the closure of the Cammell Laird shipyard in Birkenhead, Labour has chosen to challenge the Government on unemployment in a set-piece debate next Tuesday.
Raising the issue at Question Time, Mr Smith described the Post Office job losses as 'staggering' and asked John Major to tell the House what action he proposed to take to stem the rising tide of unemployment. The reality of modern Britain was of 52 unemployed people seeking every vacancy in the West Midlands and 72 for every vacancy in London.
The Prime Minister replied: 'Everyone of course regrets job losses wherever they come from. In the case of the Post Office, I am glad these are to be spread and to be sought voluntarily. The only way to create long term sustainable jobs is to create the right policies which produce long term sustainable growth. That is precisely what we are putting in place.'
Mr Major went on: 'If Mr Smith is really concerned about jobs, why doesn't he drop his commitment to a pay roll tax, the social chapter and the minimum wage. He should remember what happened the last time a Labour government tried to buy its way out of recession - he was a member of that government - 27 per cent inflation and no growth.'
But the Labour leader asked: 'Is it not pathetic that after 15 years of Conservative government and after the Prime Minister has been in office for over two years he is still seeking to blame others for unemployment?'
Highlighting the losses at Fords and the 900 to go at Cammell Laird, Mr Smith said: 'Unemployment is now a cancer eating at the fabric of British society. When at long last is he going to take some action against unemployment?'
The Prime Minister contrasted Mr Smith's concern for Cammell Laird with Labour's defence policy which, he claimed, would put hundreds of thousands of people out of work. 'Our priority has been to create the right conditions for growth.' He said the Government had cut inflation to under 4 per cent, cut taxes, and cut interest rates to 7 per cent - the lowest in the EC.
Michael Heseltine, President of the Board of Trade, was also upbraided over the litany of redundancies when he announced to the Commons that private sector bids were being invited to run 15 pilot One Stop Shops to provide advice to small and medium-sized business. The DTI expects to spend pounds 3.5m on the shops in the first year, starting after next March. If the pilots are successful, a network could develop across England. Though Labour welcomed the advice service, Derek Fatchett, a party trade and industry spokesman, said the statement would offer little immediate help to small businesses facing 'punitive' interest rates imposed by the banks or those with severe cash flow problems because of late payment of bills.
Nor would it help the tens of thousands of businesses that had already gone to the wall during the recession. 'The economic policies of this government are the root cause of the problems faced by small businesses,' Mr Fatchett said.
When a shipyard like Cammell Laird or a factory like British Aerospace at Hatfield closed, the effect was felt not only by the workers who lost their jobs but by the small companies who supplied the plant.
Mr Heseltine said Barclays Bank estimated that in the first three quarters of 1992 there were over 300,000 new starts in the small industrial sector.Reuse content