HC Deb 22 February 1956 vol 549 cc530-8

Motion made, and Question proposed, That this House do now adjourn.—[Mr. R. Thompson.]

11.12 p.m.

Mr. S. O. Davies (Merthyr Tydvil)

I regret that circumstances have compelled me to keep the House for about another half an hour longer than it has already sat today, but I most sincerely feel that the reason for my getting up at this time is a very substantial one. I am sorry that the Parliamentary Secretary to the Ministry of Labour, who is both young in age and in experience as Parliamentary Secretary, has had to come here, but he will, I am sure, understand why I am compelled to keep him, and the House, sitting a little longer.

On 7th February I asked the Minister of Labour, in a Question, what action he was taking to remedy the unemployment arising from the redundancy of more than 200 workers at works, the names of which have been supplied to him, in Merthyr Tydvil and Aberdare. Later, by letter to the Minister, I asked whether this redundancy was in any way due to Government policy, but I am sorry to say that I have not even received an acknowledgment of my letter.

The answer to my Question was that the local employment exchanges were making every effort to place the redundant workers in other employment, that no great difficulties were anticipated at Aberdare, but that, at Merthyr Tydvil, prospects were much less bright. My own view is that today the prospects in my own constituency are rather grim. The Minister added that one firm had agreed to postpone discharges until 10th February. But this firm not only postponed the discharges, but also discharged, at practically the same time, another 200 of its workers, making the dismissals from that works total 400.

But this is not the only works in my constituency from which workers have recently been discharged. In one other works, 70 workers were discharged, and in yet another between 80 and 90. No assurances can be given by these or any of the other local employers that no further discharges will take place. In fact, the general feeling in the constituency, in the light of the Government's policies which are so reminiscent of the inter-war years is that further unemployment is inevitable.

Naturally, my constituents are profoundly disturbed by these happenings. Their minds go back to those horrible and disastrous inter-war years when over 23,000 of the population of my small county borough were driven from the area because there was nothing to sustain them. Half a million of my countrymen in Wales suffered in the same way. No fewer than 12 collieries within and on the fringe of my constituency were closed, abandoned and ruined. The historic Dowlais iron and steel works was closed down and most of its plant was sold for scrap.

We had twelve to fourteen years of horrible mass unemployment in Merthyr and Dowlais, that is, most of the constituency which I try to represent in this House, and we cannot be expected to forget the effects of those years. During those years, some 1,800 collieries were closed and some half a million men and boys were driven from the mining industry. If such awful disasters could happen in those days to our basic industries of coal, iron and steel, what chance have we now?

Our new post-war industries are largely engaged in manufacturing consumer goods. They are subject to the disastrous policies of the Government, although I admit that these policies are couched in somewhat different language today. I repeat that unemployment in my constituency is the direct and, in some instances, the indirect consequence of Government action. That is my justification for speaking at this late hour of the night.

The Government must be aware of the disastrous effect of the increased Bank Rate, the Purchase Tax manipulations, the credit squeeze, the unleashing, on the one hand, of the dividend spree and, on the other, the almost wholesale embargo of a thousand and one items that we produce and are capable of producing to countries with populations amounting to 1,000 million.

I hope that the Parliamentary Secretary will be able to assure me that I may be wrong, but this is fixed in the minds and the hearts of my constituents as well as myself. They fear that it is the undying faith of many Tory politicians and their rich supporters to have a large army of unemployed for use as an effective instrument against those who may be in employment. I do not apologise for this language. The Government have asked for it.

Another cause of our anxiety is that many of our new factories in South Wales are offshoots or extensions of long-established factories outside Wales. It is, therefore, natural for us to fear that in a serious trade recession, these factories of ours would be the first to suffer. There is every reason for this fear.

One local factory has had to put off 70 workers because of the effect of Government policy on other works 200 or 300 miles from Merthyr Tydvil, owned by the same company. I know the principals of this excellent firm. They have a splendid way of handling the people whom they employ, they have a record of turning out first-class work, and they will do anything they can to co-operate. They tell me that their other works, whose production is different from that of the Merthyr Tydvil factory, have been so severely disrupted that the repercussions affect us in Merthyr Tydvil.

We in Merthyr Tydvil—in fact, in the whole of the South Wales Development Area—have no illusions as to which areas will be the first to suffer, and suffer most, if the Government persist in their present unemployment-making policy. Hence my reason for seeking this early opportunity of protesting against that policy and obtaining a frank reply to this question from a Government spokesman.

How can mass unemployment be avoided in Merthyr Tydvil and other parts of South Wales if the Government persist in their present policy? What message will the Parliamentary Secretary give me tonight to take back to my constituents? If it be an encouraging one, I assure him that it will be encouraging also to thousands of other workers in the factories and works in the valleys of Monmouthshire and Glamorgan.

I hope that the Parliamentary Secretary may give us tonight a little encouragement because my constituency has long and painful memories of the tragic depression of the inter-war years. The seat of the industrial revolution in Wales had not known unemployment for 175 years. Yet, within months, its indus trial foundation was removed from beneath it. I know that hon. Members have a shrewd idea of what the people there have gone through. I appeal to the Government to reconsider many of their techniques today, and to see to it that we shall not be hurtled back to the conditions we experienced in those sad years between the two world wars.

11.26 p.m.

Mr. Arthur Probert (Aberdare)

I am grateful to the Parliamentary Secretary for allowing me two minutes to add to what has been said by my hon. Friend the Member for Merthyr Tydvil (Mr. S. O. Davies).

There is one vital consideration I would impress upon the Minister. I was very pleased to hear the Chancellor of the Exchequer say on Monday that he would not be a party to the idea of bringing about unemployment in order to solve the problem of inflation. That is a policy with which we on this side heartily disagree. The problem of production is bound up with the mining problem in my constituency and in the constituency of my hon. Friend. I would stress that, because there are fears which the hon. Gentleman could nip in the bud right now. It is vitally important to the mining industry that in the areas where the mining industry is carried on there should be maintained and developed a variety of other industries. There should be varied industry in the Development Areas, of which my constituency forms a part.

I am very concerned at some of the questions and answers contained in the Second Report of the Select Committee on Estimates. It deals with the Development Areas, and there was a tendency in some of the questions and answers to suggest that if there were unemployment in other industries in the mining areas we should push young men into the mines. That is a most dangerous and specious argument. They will not be driven to the mines. They will go away from the mining areas to seek work and a more varied life elsewhere, and their parents themselves will pack up and go away, with the object of improving their children's prospects. There ought to be in the mining areas maintenance and development of various industries. There are other important social aspects of the matter, but I have not time to deal with these now.

11.28 p.m.

The Parliamentary Secretary to the Ministry of Labour and National Service (Mr. Robert Carr)

First, I would say how well I understand that the hon. Member for Merthyr Tydvil (Mr. S. O. Davies) and the hon. Member for Aberdare (Mr. Probert) should feel concerned about any signs of increased unemployment in their areas. They represent one of the worst hit areas in the tragic depression of the 'twenties and 'thirties. I know that the constituency of the hon. Member for Merthyr Tydvil suffered for eight years a consistent rate of more than 50 per cent. unemployment. I know that the memory of that distress must be strong, and must remain strong for a long time. I also know that it must have left a scar of anxiety which makes itself felt anew whenever signs of difficulty appear.

I would assure the hon. Gentleman and his constituents that we always consider this matter with an understanding of their interests, remembering what the people there suffered in the past. It is impossible for me, in the course of ten minutes, to go into all the issues of general Government policy which arise. For one thing it is really more for my right hon. Friend the President of the Board of Trade than for us at the Ministry of Labour to discuss trading policies, although I shall later say a little about those aspects.

In answer to the general point made by the hon. Gentleman, I want to repeat the assurance given by my right hon. Friend the Chancellor of the Exchequer on Monday. He said: There is a great deal of talk about the need artificially to create unemployment. I for one will never be a party to that. Later, he said: …if it were once thought that in the need we have today…to cure the inflationary danger we were going to plunge back into a deflationary movement regardless of the effect upon the life of our industrial workers, we should fail—and deserve to fail."—[OFFICIAL REPORT, 21st February, 1956; Vol. 101, c. 42.] That is the declared policy of the Government.

Coming to the details of the situation, I, would first, like to look at the facts of the matter. While in no way belittling the importance and concern which the hon. Gentleman has stressed about recent events in his constituency, I believe that the figures will show that the situation is perhaps not as serious as he imagines it to be. We must consider the present position in this area against the general background of progress in the last few years. The average rate of unemployment in the Merthyr Tydvil area for as recently as the year 1951 was 6.5 per cent. For 1952, it was 6.6 per cent. In 1953, it was 5.1 per cent. In 1954, it was 4.3 per cent. In 1955, last year, it was 2.8 per cent. This is a record of substantial and steady progress.

What is the present position? There have recently been some serious redundancies, as the hon. Gentleman pointed out, totalling about 500 people in the course of a week or two, mainly in one line of business. As a result, the latest figure of unemployment in the area, which relates to 13th February, the beginning of last week, was 882 people, representing 3.9 per cent, unemployment. That figure takes into account rather more than half of the 500 redundancies in question. The second half would only come into account this week, for which we have no figure, but even supposing all the efforts of my Ministry at resettlement failed—and I do not believe they are failing or will fail—we would then face the fact that the figure for unemployment would rise to perhaps 4½ per cent.

I hope it will not reach this figure, because I believe that we shall manage to place many of these people in alternative employment.

In considering the figure of 3.9 per cent. unemployment at 13th February we must realise that there is always a seasonal fluctuation at this time of year and that February is normally a bad time of the year. Bearing that in mind it may be useful to look at the February figure for the last few years. In February, 1951, it was 7.7 per cent.; in 1952, it was 6.6 per cent.; in 1953, it was 6.2 per cent.; in 1954, it was 5 per cent.; in 1955, it was 3.7 per cent. So that even after these redundancies, and even assuming that none of them is taken up—and I am sure it will not be as bad as that—the unemployment figure will still be lower than it has ever been at this time of year, with the one exception of last year, when it was very slightly lower.

Mr. S. O. Davies

The seasonal redundancies did not take place in the factories at present affected.

Mr. Carr

But even with these redundancies, unemployment is lower than in any recent year at this time, with the exception of last year, and need not give cause for undue alarm; although I would not suggest that the figures should be disregarded—and I can assure the hon. Gentleman that we are not disregarding them.

Having analysed these figures and put them in perspective, I should like to consider the industrial background in this area, because this is what really determines our judgment of what we think about the future trends and about the chances of placing those who have become redundant in new employment. The present redundancies have, as I have said, occurred almost entirely in one line of business—in the production of washing machines, and the packing facilities associated with that production.

This is important because the progress which has been achieved in recent years in reducing the rate of unemployment in the area has been due to the introduction of a number of new and varied industries. Here, I am indebted for information to my right hon. Friend the President of the Board of Trade who, as the House will be aware, is responsible for the general distribution of industry and the carrying out of that policy.

At present, roughly one-third of the number of men employed in the Merthyr Tydvil area, and about half of the women, are working in these new industries—a very different picture indeed from that before the war, and a tremendous source of increased strength. The amount of factory building during and since the war in this area measures as much as close on a million square feet in terms of floor space.

I want to emphasise the variety of industry which has come into these new factories. They produce such diverse things as chemicals, aircraft parts, toys, perambulators, hosiery, and electric lamps. This diversity is, I believe, immensely important, because it should ensure that if the pattern of demand changes, if one factory falls off for the moment, the general level of demand for labour in the area as a whole ought not to be too seriously affected.

I would point out to the hon. Member, who is concerned about some recent Government policies—the merits of which I cannot argue tonight—that the majority of these products are not going to be affected by recent changes, for example hire-purchase control. Perambulators, for instance, have been specifically excluded from these changes.

Mr. Davies

Washing machines?

Mr. Carr

Industries other than this one where there are redundancies at present are not likely to be affected by these measures.

We believe that these new firms are solidly based and are reasonably stable. We think that they are more or less self-contained units, and although they may be additional factories to parent firms elsewhere in the country, we do not believe that they are to be regarded as merely extensions of firms whose main production is carried on elsewhere. We think that they have come to Merthyr Tydvil to stay. We are reinforced in that belief by the faith that, as the hon. Gentleman himself said, some of these firms are big substantial concerns renowned as good and responsible employers, and we place considerable faith in them.

When we come to consider what has been done to place those declared redundant in alternative employment—and this is the main concern of the Minister of Labour—even in so short a time—only over the last two or three weeks—we have had considerable success.

Mr. Davies

In this locality?

Mr. Carr

Yes. By last Friday 120 of the workers from the washing machine factory had registered at our offices as wanting new employment. Of those, 70 had already been placed by the beginning of this week, 25 in coal mining, 11 in building, five in quarrying, eight in aircraft components, eight in defence work and the rest in miscellaneous trades. This week, a further 95 have registered and we are now actively engaged in trying to place them.

In reply to the hon. Member for Aberdare, I know that there have been some redundancies in his area and I hear that, unfortunately, there have been some more today. The position is, as my right hon. Friend the Minister said in reply to the Question on the 7th of this month, much easier at Aberdare than in neighbouring Merthyr Tydvil, because there are about as many registered vacancies as registered people wanting them, whereas in Merthyr Tydvil the position is not as favourable. We believe that the position there can be handled. I wish I could go into all this in more detail, because we realise its tremendous human importance.

To sum up, I believe that the figures I have given, and taking account of the latest redundancies, show that unemployment is lower than it has even been in any year but one in the history of this area and that figure should, therefore, give rise to some confidence.

Mr. Davies

It is a long history.

Mr. Carr

I know it is a long history, but the variety of industry, which I have briefly described, is a tremendous source of increased strength compared with pre-war years in facing anything that may come. Finally, I should like to repeat the Chancellor's assurance that it is not the Government's intention to try to solve our difficulties by deliberately creating a pool of unemployment.

Question put and agreed to.

Adjourned accordingly at nineteen minutes to Twelve o'clock.

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