§ Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Redmayne.]
§ 1.51 a.m.
§ Mr. Roy Jenkins (Birmingham, Stechford)
I have secured this Adjournment debate tonight only because the hon. Member who was originally successful in the Ballot decided to withdraw his claim. I cannot help feeling that he was better informed than I on the nature and course of tonight's business.
The subject I wish to raise is the unemployment situation in Birmingham. In raising it I am well aware that it can be claimed that from one point of view Birmingham, so far from having a special problem in this respect, is rather better off than most of the country, in the sense that its unemployment percentage at the present time is lower than the average for the country as a whole. I am informed that on 16th February—which is the latest date for which figures are publicly available, and which is a date before the outbreak of the Austin strike, so that the figures are in no way affected by that strike or its repercussions —there were about 8,500 people wholly unemployed. That amounts to 1.4 per cent. of the insured population as against a national average of 2.2 per cent.
From that point of view the situation in Birmingham is a good deal better than in the country as a whole. But there is another aspect of the problem. The rate of deterioration in the employment situation over the last year or 18 months has been much sharper in Birmingham than in the rest of the country. If one looks back to October, 1951, there were then only 2,600 people wholly unemployed—which represented 0.4 per cent. of the insured population. That was at a time when in the country generally there were 260,000 unemployed.
If the increase over that period of approximately 18 months in the country generally had been as sharp as it has been in Birmingham, the unemployment figures would now be between 900,000 and one million. The unemployment figures for the country as a whole being under half a million, it is obvious that the increase in the rate of unemployment in Birmingham during the past year or 18 months 2025 has been markedly greater than in the rest of the country.
There are three ways in which the change in the situation in Birmingham has shown itself. The first is—I am informed—that not only has there been this quite substantial increase in the percentage of wholly unemployed, but of those so unemployed the number claiming benefit, and, therefore, having been without work for a fairly long period, has risen very sharply within the total number of unemployed.
The second is that there has also been a marked decline in the number of vacancies. Those are now only about 3.500—less than half the numbers unemployed. That is a very different situation from the one prevailing for many years in the past, when the number of vacancies considerably exceeded the number of people without work.
My third point is that I do not think one can measure the decline in trade in Birmingham solely by the figures of those wholly unemployed. There is the increase in short-time working, and some married women have gone out of industry altogether. This means that the decline in the number of hours worked is more than that which one would gather from the unemployment figures alone. The decline in production has certainly been greater. I think, than that.
I suppose that the Government's case would be to say that what has been happening in Birmingham, which had full employment for many years, is a relaxation of excessive pressure on labour which has enabled and will enable a useful redeployment to take place. There has been a slackening of the pressure on labour, which has allowed of useful redeployment being effected. I see that case in principle, and I do not argue that, in the present circumstances of this country's economy, one should take the view that, with a full employment policy, no man should ever change his job. That would be simply nonsense, and dangerous nonsense. But, the Government's argument—or what I presume is their argument, and which I am pursuing—is not good in practice.
Taking the country as a whole, there have been certain changes in 1952 in the deployment of the labour force. The most striking has been the gain of 30,000 men to the aircraft industry. There have 2026 been some other rather curious changes, such as the fact that the distributive trades have gained manpower. But what I am worried about is that I am not sure, whatever happened in the past year, that the aircraft industry wants any more labour; that we are now in the position that if one throws people out of the less essential trades, there is not the demand for those people in the more important occupations. So the account is not balanced at all. There is the loss of employment, with all the consequent problems for the individual, and there is the loss of production for the country, with nothing on the other side of the balance sheet.
If the Parliamentary Secretary does not entirely accept this argument, I hope he will, in his reply, try to say what are the trades in the Birmingham area which now want more labour. We know the trades which have been laying off a number of people, and increasing short-time working; the motor trade, accessories, the cycle trade, and the aluminium side of non-ferrous metals, have been affected. But what are the other trades which could do with some labour at the present time? I am advised that in the case of the aircraft industry, it would like to have certain highly skilled men, but that unless it gets those men, it has practically no need for additional labour of other kinds.
It seems to me that it is almost impossible to prize these very highly skilled men—I am talking about a very limited number of men—out of the industries at present holding them by means of any policy of disinflation. In order to do it by that sort of means, one would have to have a deflationary policy which would throw great numbers of unskilled and semi-skilled people out of work before the very skilled were released. Apart from that, I do not believe that there is any great demand for labour in the aircraft industry or other industries which one might like to see manned up.
My main question to the Parliamentary Secretary is to ask him to try to tell us what are the other trades which he would like to see manned up at the present time. If he cannot answer that, can he give us his idea of the future of the labour situation in Birmingham? 2027 We have all been glad to see indications during the last week or so that the order position in the cycle industry and, to some extent, in the motor industry looks a little brighter than it did some time ago, but we should also agree that, looking at it from a slightly longer-term point of view, over the next year or two years it may well be difficult for the cycle and motor industries, in relation to the state of the export markets for their products, to maintain the production which they had in 1950 and 1951. If in the medium-term future they will be unable to maintain the level of exports and production, what other developing industries does the Parliamentary Secretary say will take up the slack?
As to my third question, I understand that it was the view, certainly in the early days of the defence programme, that so far as was possible work should not be sent to the Birmingham and Coventry areas because of the very great pressure on the labour resources which existed. The position has obviously changed very greatly since that time, and I should like an assurance that it is fully recognised that a substantial change has come over the labour situation in that area and that, so far from it being Government policy to keep orders away from that area, defence or other Government orders will be directed there to take up to some extent the substantial slack which has recently developed.
§ 2.3 a.m.
§ Sir Edward Boyle (Birmingham, Hands-worth)
I have two short points to make. In the earlier part of his remarks, the hon. Member for Stechford (Mr. Roy Jenkins) used the phrase "throwing people out of work." I hope he did not mean to imply —I do not think he did—that the unemployment situation in the motor industry today, for example, is in any important respect the result of the present Government's policy, because I do not believe it is. I know that there is absolutely no intention on the part of the present Government to use a deflationary policy as a means of trying to prize skilled labour from one job, because it is desired they should go to another, with a large amount of semi-skilled labour being thrown out of work. That is certainly not the policy of the Government.
2028 One has also to remember that the level of employment in the Birmingham area is still extremely high. At the moment the average figure for unemployment in the Birmingham area is 1.4 per cent., which is only.1 per cent. higher than the average for the whole country when the present Government took office, and it is slightly under half the figure which has always been accepted as a general full employment standard. I am not saying that simply because of what the right hon. Member for Leeds, South (Mr. Gaitskell) said. I am thinking of the figure given by Lord Beveridge in his book "Full Employment in a Free Society"; for many years we have taken the figure of 3 per cent. as a fair full employment standard.
So long as the figures in Birmingham are not worse than they are at present, it would be a mistake to take too gloomy a view. Provided something can be done to ensure that the prosperity of the area is not too dependent on one or two industries, I do not think there is any serious reason to expect wholesale unemployment or large-scale depression in the Birmingham area in the years immediately ahead.
§ 2.5 a.m.
§ Mr. Julius Silverman (Birmingham, Erdington)
As my hon. Friend the Member for Stechford (Mr. Roy Jenkins) said, the question of unemployment in Birmingham is not confined to the actual numbers of fully unemployed. There are a large number of people on short-time working. I understand that the latest figure—I do not know if the Parliamentary Secretary has a later figure—is about 22,000 workers in the Birmingham district on short time, and that is about 9,000 more than it was two months ago. Those are the latest figures that I have. I am told that there has recently been a great increase, but it is not likely that the Ministry would have that figure because all those who are on short-time working do not register.
In certain of the industries associated with the motor industry a four-day week has been worked; and in the cycle industry the decline has been catastrophic, a large number in that industry having recently been put on a three-day week. It is quite true, as the hon. Member for Handsworth (Sir E. Boyle) said, that if the figures remained as they are they 2029 would not be so bad and it would not be necessary to take too gloomy a view of the situation. But there is a great deal of apprehension among the workers in industry in Birmingham, and what hangs over them is the shadow of the unemployment in the inter-war years. The workers in that city are asking themselves, "Is it going to come back again?"
It is not merely a question of unemployment as it is today, but there is this general fear and recollection of the past. It certainly is a serious problem today. That is why it would be useful if the Parliamentary Secretary could give us an assurance tonight that the Government are doing everything that can be done for this problem, and tell us what things they are considering and where exactly they are going. I support the plea of my hon. Friend in asking the Parliamentary Secretary to say how the Government view the situation, what is their vision of the future and what are their plans.
§ 2.7 a.m.
§ The Parliamentary Secretary to the Ministry of Labour (Mr. Harold Watkinson)
Let me begin by making it quite plain that in the Birmingham area, as everywhere else, in every aspect of Government economic policy the aim of maintaining full continuing employment is in the forefront. Full employment can never be achieved unless the general economic health of the nation is maintained, and the Government must be careful, in looking at special cases in particular areas, not to be diverted from their main overall plan for maintaining the highest possible level of employment throughout the nation as a whole.
That does not mean in any way that we will not study with the greatest possible sympathy particular problems in any particular area, and I am glad that the hon. Member for Stechford (Mr. Roy Jenkins) has raised the question of Birmingham this evening, even at this late hour. In looking at the situation in Birmingham we must not forget that the level of employment in that area compares extremely favourably with other areas. My hon. Friend the Member for Handsworth (Sir E. Boyle) has quoted the figure of 1.4 per cent. of the total insured population, and that is less than half the figure in areas such as Scotland 2030 and South Wales, where there are greater difficulties.
Birmingham has an almost unique diversification of industry, and is probably better equipped to face difficult times than any other industrial area. That does not mean that the Government do not realise that every man or woman out of work represents a human problem which lays a responsibility on the Government to do all that they can to solve it. But we must see the other side of the picture, and it is that the funds which help to cushion unemployment between jobs, such as unemployment benefit, National Assistance and the social services, are provided out of the efficiency and earnings of British industry as a whole. If that fails, all fails. Therefore, we must encourage the adaptability and competitive vigour of our industries as part of our national plan to maintain the maximum volume of exports at competitive cost.
It is in the light of these considerations that I wish to look at the problem in Birmingham. I quite accept that the vehicle industry in particular has been facing a difficult time due to the closing of some export markets and what amounted to a buyer's strike on the home market. These are the fiscal aspects of that problem, and on them I can only quote the Chancellor's reply:I am not convinced that it would be right to anticipate the normal process in which the claim of the motor industry for relief from Purchase Tax will be taken into account together with all the other similar claims of other industries.If we examine the general economic aspects there are reasons to hope that the position may improve. We have had experience of another difficulty of this kind—in the textile industry last year. That industry has recovered, and from a far more disastrous slump than is facing the vehicle industry in Birmingham at the moment. The position in Birmingham cannot, of course, be examined without a reference to the motor-car industry as a whole. I am sure that the hon. Members who have spoken realise that the motorcar industry, although it is situated in Coventry, looks to Birmingham for the supply of many of its components.
In Coventry there are already signs that firms which managed to introduce new products or put new cars on the market, have considerably improved their 2031 outlook. The Standard Company is an example. Short-time working there is now very much less than it was even a month ago. This is generally true of other Coventry firms also. There are signs of improvement, and they will soon spread to the ancillary industries in Birmingham that supply motor-car assembly plants.
In the motor cycle industry the prospects are said to be improving, and there are indications, I gather from our Regional Controller, that the industry may soon be resuming normal working. The cycle industry faces a more difficult outlook, but one of the largest plants, the Hercules factory, has resumed full time today. This is very welcome, although there has been a great fall in demand, and I am not predicting whether the cycle industry can maintain anything like full employment. It depends on the foreign markets, and there, at least at the moment, the outlook is more hopeful.
We have been asked what is our general economic policy to meet these general economic problems. Our first task is to re-open as many foreign markets to our traders as we can. We have just agreed on import quotas for Sweden which provide for a higher figure for motor cycles. The American market looks very promising, and we have great hopes that the sales of bicycles and other vehicles there will increase. Australia has recently modified her restrictions on imports from 20 per cent. of the 1950 value to 30 per cent. Over a large part of the field where imports are free we are facing much more competitive conditions, and prices are often the ruling factor.
It has been said that the true unemployment position is masked by short-time working, and various estimates of the amount of short time have been given. I wish to make it plain that those temporarily stopped on the day of the count are included in the unemployment figures, but not all those who may be on short time during a week. That is an important distinction. I do not think present figures can be regarded as any sort of guide, because with the Austin strike affecting a large range of supplying plants, the present short-time figures must be quite unrealistic. I think the most accurate figure I can give of the number on short time 2032 before the strike was 7,000, compared with the number of unemployed, which was approximately 9,000.
There is still a shortage of skilled labour in the area but I agree that the number of vacancies has decreased considerably, and there are still factories where a relatively small number of skilled men might help the general employment position. My Ministry is making a continuous effort throughout the area to improve this position. For example, the aircraft industry is not by any means stopping recruitment. We have supplied it with 32,000 extra people and it still wants more. However, their need of skilled labour is increasing as they fill up the more general labour posts. We are, nevertheless, doing our best to overtake the labour demand with the right people, and we are receiving from both employers and trade unions welcome co-operation in trying to achieve a balance in this task.
To put the position in perspective, it should be remembered that, as I have said, a realistic figure of people on short time is probably about 7,000. We do not know how that will balance out now that things are improving, and when the Austin strike is settled. The number out of work in the area served by our employment exchanges at Aston, Birmingham, Handsworth, Selly Oak, Sparkhill and Washwood Heath was 9,000 at 16th February, but those two figures must, after all, be compared with a total of adult insured employees in the area of almost 600,000 men and women.
If I may sum up, the point really is that the situation in Birmingham, as all over the country, reflects the more difficult and more competitive times with which we are now faced. The area remains one of the best employment centres in the country but, because we think it is one of the best employment centres, we shall certainly not put it on one side and say that there is nothing we can do for Birmingham.
As some proof of that, and in answer to the query from the hon. Member, I would say that we have taken off the restriction on the placing of armaments contracts in Coventry. There was never a firm restriction on Birmingham though it was to a certain extent covered by the Coventry restriction. Anyhow, both are now removed and there is no restriction on that sort of order going into the area. 2033 The position in respect of heavy capital goods and the machine tool industry remains satisfactory, and many firms have good order books. There are signs that the vehicle industry is picking up.
I want to end by saying that certainly the Government regard unemployment most seriously, and we shall continue to give very careful study to the Birmingham area. It may interest hon. Members to know that I have weekly reports on my desk as to the exact situation in the motor-car industry. But I do not think we should let it go out from this House tonight that the general position of the Birmingham area is one that should cause serious concern to those who work there.
2034 Full employment in any area can only be maintained by full co-operation between both sides of industry and the Government, co-operation aimed at securing lower prices and quicker deliveries of whatever that area exports. We believe that, provided that employers and trade unionists appreciate this, the Birmingham area, both from the point of view of the efficiency of its production and a high level of employment, will be in the forefront of the manufacturing areas of this country.
§ Adjourned accordingly at Eighteen Minutes past Two o'Clock a.m.