HC Deb 04 June 1956 vol 553 cc837-46

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

10.16 p.m.

Mr. A. S. Moody (Gateshead, East)

It is not my intention to delay the House long, as I am sure that on this occasion the Parliamentary Secretary will want ample time to reply.

We are concerned about the serious position developing in the furniture trade, and we are staggered by the figures of unemployment and short-time that are issued by the furniture trade unions. On 3rd May, the hon. Gentleman gave an answer to a Question of mine which did not appear to me to touch the problem. I do not suggest that the Parliamentary Secretary was misleading the House, but the fact is that the furniture trade unions throughout the country at the end of March showed that, out of 45,000 members, 4,000 were unemployed. The union branch returns for the March quarter showed that the 36 branches in the north-eastern counties report 102 discharged and 1,043 on short time. In Newcastle, on the cabinet side, 230 workers were on short time, and on the soft furnishing side 400 were on short time.

It is our claim that, according to the trade union figures, 9 per cent. of the total membership is unemployed and 33 per cent. of the workers are on short time. I hardly imagine that the Minister will accept those figures and, because of the difference between our figures and the ones he suggested in his reply on 3rd May, we have had to look for a bridge in order to arrive somewhere near the true total.

I think that a contribution to the difference in the figures is made by the method of registration. Whereas the furniture trade unions call furnishing trade workers the people engaged in making furniture for the homes of the people, the hon. Gentleman in his registration covers a far wider range. This takes in bar fitters, shop fitters and, I understand, the manufacturers of wooden busts for models. I can assure the hon. Gentleman that in the furniture trade unions we do not classify the makers of wooden busts amongst workers on the soft furnishing side or on the cabinet side of the industry.

In addition, many members who have reported as unemployed have realised that under present conditions there is little chance of being re-absorbed into the industry. Consequently, they have gone into other forms of employment. While this will reduce the numbers on the hon. Gentleman's books, it represents to the furniture industry a serious loss of skilled craftsmen whom we may never get back.

I think the Minister will now see the position as the furniture trade workers see it. The appalling thing to us is the alteration from full employment to the situation which is now with us and is developing for the worse largely as a result of Government policy. The alteration in respect of hire-purchase agreements has had a catastrophic effect upon full employment in the furniture industry. One point which I should like the hon. Gentleman to commend to his right hon. Friend for examination is the deposit for new furniture, which is now about 33⅓ per cent.

The old practice among the workers when they got married, particularly in the north of England, was to decide how much they could afford to pay weekly for furniture. They then entered into a hire-purchase agreement for furniture on the basis of that weekly sum. If they were good payers, when half the total sum was paid off the dealer would allow them to have some more furniture, bringing the total amount they owed back to the original sum. By this means, workers gradually added to their furniture.

Under the Government's present arrangements with the increased deposit, that system has been knocked on the head. Each agreement has to be a separate transaction and carries with it the requirement for a 33⅓ per cent. deposit. This is causing unemployment in the furniture trade. We believe it to be the only trade handicapped in such a manner. If we could return to the old continuing credit policy, it would assist towards full employment in the industry.

It might be said that the Purchase Tax on necessary furniture ought to be abolished altogether. In addition, we think that a deposit of 33⅓ per cent. is too high. In the case of building societies and almost every other kind of transaction, a 10 per cent. deposit is regarded as a reasonable margin to meet alll contingencies, and we think that a 10 per cent. deposit would be high enough in the case of furniture.

Also, the agreed profit margin of 45 per cent. to sales people is too high and makes the furniture too dear. The high profit margin and the Purchase Tax are killing the industry. I urge the Minister to stop the development of an ugly situation and do something to maintain full employment in the furniture industry.

10.24 p.m.

Mr. Harry Randall (Gateshead, West)

; My hon. Friend the Member for Gateshead, East (Mr. Moody) has done a service to the workers in the furniture industry by raising tonight the effect of the Government's financial policy upon the skilled trades. It is as well that we should take the opportunity of reminding the Government that there is grave disquiet among the workers in the industry. They are most apprehensive about the future and see no gleam of hope for their craft and in their industry. To a very large extent, what is now happening must lie at the door of the Government.

When we had an economic debate recently, reference was made to the figures of unemployment and short time in the furnishing trades. There was an argument about whose figures were right, those of the Minister, or those given from this side of the House. I am not sure that the Minister inquired into that. if there has been an inquiry—and no statement has so far been given to the House—I hope that a statement will be made this evening. I am much concerned that the information coming from the unions shows that the curve of employment is going down. That is likely to continue, unless the Government's policy is altered in some way.

The House owes a debt of gratitude to my hon. Friend the Member for Gateshead, East for presenting this opportunity of obtaining a statement from the Parliamentary Secretary. We do not want a merely pious statement. The workers in the industry want reassurance, and unless that reassurance is given the difficulties facing them will become more acute, as will the difficulties within the industry itself. I do not know whether, in going about the country, the Parliamentary Secretary has observed, as I have, that furnishing shop after furnishing shop is closing down, an indication not only of the present position in the industry, but of what will happen in the future, if further unemployment occurs. The House is indebted to my hon. Friend and I hope that we will have a statement tonight which will reassure the workers in the industry.

10.27 p.m.

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

I should like, first, to clear one or two of the specific matters raised by the hon. Member for Gateshead, West (Mr. Randall). He referred to the figures mentioned in the debate on employment on 20th March. I can assure him that my right hon. Friend looked into the points then raised and wrote to the hon. Member for West Ham, North (Mr. Lewis). That letter was published in the OFFICIAL REPORT on 19th April. May I summarise the position? In order to get figures for use in the employment debate, we had to make an estimate more hurriedly than we usually make our estimates. The revised estimate given in the letter, while still falling considerably short of the union's figure, was substantially higher than that given by my right hon. Friend in the debate. That is something which I should make clear at the outset.

Many of the issues raised by the hon. Member for Gateshead, West and the hon. Member for Gateshead, East (Mr. Moody) are primarily matters for my right hon. Friend the President of the Board of Trade. If those were the issues about which they particularly wanted to speak tonight, they should have addressed the Adjournment debate to my right hon. Friend's Department and not to mine. I can deal in detail only with that part of the picture which affects the Ministry of Labour, and that I will try to do. All I want to say about the general economic and trading picture is that we must consider the points which the two hon. Members have made against the background of the general purpose of our economic policy.

The prime purpose and duty of the Government is undoubtedly to maintain full employment in this country, and to maintain it not just this year but over a long and continuing period. If we are to achieve this, full employment cannot mean a fixed pattern of employment, in which the level of employment in any particular industry never changes. In the conditions which we have to face, there must be flexibility and change. Industries must rise and fall in size, not just for the fun of it, but because world economic circumstances compel us in these directions.

I certainly do not want to belittle the seriousness and the unpleasantness of such change to those affected by it, but we must realise that it is unavoidable, and though I regret that some furniture workers may at the moment have had to go into other industries, I cannot accept any definition that classes those people as unemployed. It may be that they would rather be employed in the furniture industry—and it may be that they can be again employed in it—but they cannot be regarded as unemployed when they are in fact in full-time employment. We cannot include in our figures of unemployment people who have had to transfer temporarily to another industry.

The danger to full employment is that we may become unable to afford to bring in enough raw materials from abroad to keep all our factories at work. I am here referring not merely to the furniture industry but to all industries. We have been consuming too much at home and selling too little abroad. That is why my right hon. Friend the Chancellor of the Exchequer has had to introduce measures to restrain the booming growth of home consumption. That is the reason for the hire-purchase restrictions and the Purchase Tax changes—two matters mentioned by the hon. Member tonight.

Those are matters primarily for my right hon. Friend the President of the Board of Trade to debate, and I would remind the hon. Member that there have been at least two debates in this House upon that subject, including one raised on the Adjournment by the hon. Member for Shoreditch and Finsbury (Mr. Collins), who dealt with the furniture industry.

I would like to correct the hon. Member for Gateshead, East upon one point. I think he referred to the hire-purchase deposit as being 33⅓ per cent., whereas it is only 20 per cent., which is substantially lower. It was previously 15 per cent. The hon. Gentleman now says that it would be a good thing if it were 10 per cent., but it is only fair to remind him that neither he nor his party voted against the rise to 15 per cent., although they did vote against the rise to 20 per cent.

I want to consider the effects of these restrictions upon the employment position of those in the furniture industry. In order to be clear what we are talking about—and as it was one of the points raised by the hon. Member—I will explain what the Ministry of Labour meant when it refers to the furniture industry According to the standard industrial classification used in Government Departments, the furniture industry means the manufacturing of soft furnishings, like curtains, mattresses, etc., and wooden or upholstered furniture but not metal furniture. It does not include shop and office fittings, which is a separate industry. That is the definition of the furniture industry upon which we base our statistics, and it certainly does not include shop and office fitting.

With that definition of the industry, I would like to say a word about the total employment in the industry. In December, 1952, employment in the furniture industry was 130,000. It grew during 1953 and 1954, until it reached a peak, in December, 1954, of 142,000. During 1955 it fell slightly, and at the end of last December it had dropped from 142,000 to 138,000. In the succeeding four months, to the end of this April, it dropped by a further 10,000 to 128,000, so that there was a drop of 10,000 in the first four months of this year.

Of this fall, 4,000 was in March and 2,000 in April, which means that it looks as though in April the rate of decrease was slackening and not curving more steeply downwards, as the hon. Member for Gateshead, West suggested. It is also fair to point out that some of this fall is seasonal, because there is always some fall in employment in this industry in the first few months of the year, although I readily admit that the seasonal element is only a minor part of the drop of 10,000 in employment in the industry in the first four months of this year.

I am glad to say that the fall in employment in the industry has not been reflected in a corresponding increase in unemployment. I realise that that has meant that people who are furniture trade workers have had to leave that industry and enter another, but they are not unemployed. Indeed, unemployment in the furniture industry has risen by only a few hundred during the period of the fall of 10,000 in the figure of the total employed. I should like to point out to both hon. Members that this, again, shows that it is quite wrong to talk about the industry taking a plunge downwards.

Unemployment was, in fact, lower in May this year than at the similar time in any of the three previous years. In May, 1956, the number wholly unemployed in the furniture industry was 1,745; in May last year it was 1,839; in May, 1954, it was 2,053; and in May, 1953, it was 2,407. It was lower this May than in the three previous years.

Perhaps the hon. Member would like to see the same figures for Gateshead itself. Unemployment in May this year was 16; it was also 16 in May last year; and it was 15 in May, 1954. In Gateshead the picture is the same as it has been for the last two years, and over the country as a whole there is less unemployment in the furniture industry today than there has been at the same time in any of the three previous years.

While unemployment is not at an alarming level, I admit that a considerable amount of short-time working exists, and the main disagreement about the relative statistics of the union and of the Ministry is, I think, over short-time working. I should like to explain what are our figures on short-time working and how they are obtained.

First of all, our statistics are gathered on an industry and not on an occupational basis. They therefore do not and cannot claim to take into account all members of the National Union of Furniture Trade Operatives, some of whom may be exercising their craft in other industries and not in the furniture industry itself. We can measure only the statistics for the furniture industry. If some furniture craftsmen are unemployed or working short-time in other industries, their unemployment or short-time working will be thrown up in the figures for those industries, but we cannot identify them as furniture trade workers. In all these figures I am talking about short- time working in the furniture industry as I defined it a few moments ago.

How do we measure short-time working? An actual count is taken only once a quarter in each year—at the end of February, at the end of May, at the end of August and at the end of November. On these quarterly occasions all firms employing more than 10 men have to make a return of the number of their employees working less than their standard weekly hours. There are, of course, the very small firms with 10 or fewer employees, and they are not covered by this count. This is undoubtedly an element of incompleteness in our figures, but to try to get returns from large numbers of really tiny firms would, in our view,—and it is not an entirely new view—mean sending out a great number of forms and perhaps not getting really satisfactory answers. Our actual count of short-time working is a quarterly affair which does not take into account the very small firms.

In between these quarterly counts we make estimates—and they are only estimates—of short-time working, based on returns from local offices throughout the country. I want to make it quite clear that these estimates, unlike the actual counts, do include an estimate of what is happening at the smallest firms which are not covered by the counts. The position is, therefore, that we have our quarterly counts—which are accurate, but exclude the smallest firms that employ ten or less people—and we have the weekly estimates, which are estimates only, but which, with the long skill and experience of our local offices' staffs throughout the country, do show, if not the exact number, at least a trend. In considering these employment figures, it is probably most important, I think, to have a clear picture of the trend.

That is the explanation of the figures. I would now like to say what the figures are. There was a count at the end of May, but, as this is only 4th June, I am sorry that we have not yet got the results. The previous count was at the end of February, and amounted to 7,300. Excluding the smallest firms, therefore, I am confident that the amount of short-time working at the end of February was 7,300 in the furniture industry.

What about the estimates? At the middle of March, we estimated that there would be about 10,000 working short-time in the industry. That is the corrected figure of the one which my right hon. Friend gave in the employment debate. In the middle of April, we estimated that the figure was still about 10,000. At the end of May—that is, last week—we estimated, I am glad to say, that the amount of short-time working had gone down probably to about 8,000.

How do those figures compare with those given by the union? The union gave a figure of 12,000 for the middle of March and 13,000 for the middle of April, as compared with our 10,000 in each case. That is appreciably higher. I have no knowledge of the union's figure for May, but there is that discrepancy between the two sets of figures for March and April. What are the possible causes of this discrepancy? Frankly, I do not know. I certainly do not want to impugn the union figures in any way.

Mr. Moody

It may be that the hon. Gentleman's Department takes shops with ten workers or more; the union may take the smaller shops.

Mr. Carr

We do try to include the smaller firms in our estimates, but it is only an estimate. It may be that the union goes wider than the furniture industry itself. It may have members working in jobs not classed by us as being in that industry. I understand also that it includes workers who have lost any time, however small, for whatever reason. It may also include workers who worked less overtime or suffered some loss of earnings through lower production even though employed for the normal working week. In collecting statistics, it is always difficult to get a strictly comparable basis. In any case, perhaps the most important matter is the trend shown, and there is no doubt that, whichever figures are taken, there is substantial short-time working.

To sum up, therefore, the furniture industry, after a period of fairly rapid expansion, has reduced its labour force, mostly in the last few months, to the level at which it started three years ago. This reduction in recent months has coincided with the period of seasonal slackness in the trade, although, as I said, I do not want to attribute to that more than a minor part. Due to the generally high demand for labour, however, the number of wholly unemployed furniture workers has gone up by only a few hundred, although at the same time there is this considerable amount of short-time working. I am glad to say, however, that this seems to have been decreasing somewhat in recent weeks, as has the degree of actual unemployment in the industry. I can assure the hon. Gentleman that we will watch the position carefully, and I can also assure him of what I said at the outset, that the Government regard the maintenance of full employment on a permanent basis as a primary duty.

As I have already said, the Government cannot and, indeed, should not seek to maintain any particular pattern of employment. The Government's object is to provide a sufficient volume of work in total to satisfy all those who want it, and to watch out for any signs of permanent unemployment occurring, and if so to take steps in good time to correct that trend. It is the particular task of my Department to observe the situation closely for signs of any such trend appearing.

It is also the task of my Department to see that those displaced from work by the changing needs of the economy are found the most suitable alternative jobs. I can assure the hon. Gentleman that this task will be carried out with full regard for the skill and experience of the men looking for work, but we cannot guarantee that everybody will be placed in the work or industry that he has just left.

While it is true that excessive occupational change of this kind is a bad thing and gives rise to waste of laboriously acquired skills, as well as inconvenience and hardship for the persons concerned, nevertheless I fear that some degree of this sort of change may have to be tolerated in the interests of the maintenance of full employment.

The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at fourteen minutes to Eleven o'clock.