Trades Union Congress: Wage restraint plea is granted little currency: The first speech to the TUC by a CBI leader failed to inspire in the North-west yesterday, according to Martin Whitfield

THE NEED for wage restraint, a central message from Howard Davies, director general of the CBI, was lost on Lancashire's employers and workers.

John Donovan, secretary of Blackpool's Hotel and Guest House Association, believed the problem was that workers had too little money to spend, not too much. 'It's been a terrible season. There are members in trouble and a few places have closed down,' he said.

'People just haven't got the money to spend, they haven't had big pay rises and their jobs are not secure. It is nothing to do with the wages people are having to pay out. Not one member has mentioned that as a problem.'

Business in the resort's 5,000 hotels and guest houses is about 10 per cent down on last year. Traditionally a low-paid industry with 15,000 workers, the fall in trade has sent ripples throughout the local economy.

Mr Davies's other major theme - that sterling was correctly valued against the German mark - was dismissed as equally wrong by Michael Iddon, managing director of Iddon Brothers, a 100-year-old family business exporting specialist machinery for rubber parts and mouldings, mainly for the motor industry.

'If my prices are too expensive, I devalue them. That should be done to the pound. It's no good spending millions and billions supporting the pound if it is not worth supporting,' he said.

There was some support, however, for Mr Davies's call for a greater emphasis on manufacturing. Mr Iddon, whose company's work-force has been halved since the early 1980s to about 100, said that the Goverment was ignorant of the needs of industry.

'We export 70 per cent of our output. Why should we be bothered to do that? We get no thanks from the Government. There is a total lack of understanding.

'We have got a couple of big export orders which should keep us working for a few months. You talk to your MP who says 'good for you' and that's the end of their interest,' he said.

There was also agreement on the weakness of Government predictions of recovery.

Mr Iddon said: 'I was looking at my Financial Times and the FT of 12 months ago. They were saying exactly the same thing - confidently forecasting recovery in the second half of the year. They don't know what's going on, do they?

'The moment things get better the consumer will start spending on imports. They are not prepared to support their own industry and run down our own products. If shopkeepers keep on selling foreign goods to British workers, in the end there won't be any customers left.'

Outside of Blackpool's JobCentre there was further criticism of the CBI's opinions from Tommy Mulhall, 42, and John Hutchinson, 55, skilled engineers who are to be made redundant in two weeks' time from Gretone, a company manufacturing aircraft components. This was one of several visits the two had made to JobCentres in the region.

There were no jobs offering wages anything like the pounds 250 a week they received from Gretone.

Mr Mulhall said: 'The only jobs are paying pounds 80 to pounds 90 a week. They are taking advantage of the situation on the wages.'

He was not convinced that high wages destroyed jobs. He said: 'That's a load of balls. We had no wage increase last year and it has not saved our jobs, has it?'

(Photograph omitted)