A letter to the Editor of the Daily Telegraph which was published on 16th October 1984.

Mr Bernard Gosden’s letter on dealing with unemployment (Oct. 11th) seems a message of hopeless defeatism.

Mr Gosden’s suggestions really amount to either simply renaming unemployment by calling it education or retirement, or alternatively discouraging employment by (incredibly) raising taxes on companies and individuals.

The whole tenor of his and similar proposals proceeds from the assumption that there is a fixed amount of employment, so what we should do is spread it out more fairly.

The fact is Britain as a country simply does not produce enough manufactured goods.  Many of the present Government’s measures for improving the climate (training, start-up incentives and so on) are sound in themselves, but they do not tackle the central defect in our economic situation and that is the wholesale retreat by business from large sectors of the manufacturing economy.

British business has allowed itself to be largely expelled from whole areas, particularly where high quality precision manufacture is required: machine tools, plastics processing equipment, office equipment, cameras, motor cycles, half of its domestic car market, and so on, to the extent that we are now net importers of manufactured goods.

Here lies the main challenge: reconquer these markets.  This will not be done by the 130,000 or so one or two-man businesses which are born each year (balanced almost exactly by 120,000 deaths) worthwhile though they are, nor are existing large businesses likely to be net providers of new jobs.

The only way these markets will be reclaimed, and generate the jobs which go with them, is by the formation of new companies of sufficient initial size to recruit management and engineering talent commensurate with the task.  No sophisticated research or time-consuming innovation is needed – the target is the production of goods which are similar to imported products, but just a little bit better in quality and design.

The proper sources of capital for such large sacale enterprises are the banks.  This should be seen as an opportunity for them to play a part in the renaissance of Britain similar to that played by their counterparts in Germany and Japan in the fifties and sixties.