National Insurance and Family Allowances

HC Deb 10 February 1959 vol 599 cc1002-129

Motion made, and Question proposed, That a Supplementary sum, not exceeding £26,496,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1959, for sums payable by the Exchequer to the National Insurance Fund and the Industrial Injuries Fund and for payments in respect of family allowances.

3.31 p.m.

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Miss Edith Pitt)

The Vote relates to National Insurance and family allowances. The main item in this Supplementary Estimate is an addition to the £14 million deficiency payments in the original Estimate.

Provision to meet this deficit was contained in Section 2 (3, a) of the National Insurance Act, 1954. Because it was known that deficiencies in the National Insurance Fund were inevitable, the 1954 Act gave authority to meet, in addition to the Exchequer supplement of about £125 million a year, deficiency payments up to a total of £325 million in the five-year period ending 31st March, 1960.

The only use to which this Section has been put so far, since it was passed in 1954, is the provision of the £14 million in the main Estimate for 1958–59. The reason was largely that claims for unemployment benefit had been lower than the assumed figure. Now we have this addition to the £14 million of the Supplementary Estimate for £25 million, which is attributable to an increase in the level of unemployment. I will come to the reasons for that in a moment. Perhaps I might, for the convenience of the Committee, deal quickly with the other items.

The Supplementary Estimate includes an additional £1½ million for family allowances, making a total estimated expenditure of £126¾ million. Among the principal factors which give rise to the increase, is, first, that there has been a higher birth rate in the country. There were 418,500 births in the first half of 1958 compared with our forecast of 414,400. The estimated number of births for the whole current year has been revised from 816,000 to 840,000.

There has also been a small increase in the proportion of families qualifying for the 10s. family allowance for the third and subsequent children; in other words, the number of large families is larger than we estimated. There has also been a welcome increase in the number of children remaining at school over the minimum age, and, therefore, their family allowances continue. I am sure that the Committee will welcome those three signs as a mark of confidence and security in the country.

I now return to National Insurance, which, in any event, would have been in deficit this year under the present system. My right hon. Friend gave the figures of the estimated deficit in the discussion we had on the 1957 National Insurance Act. The Government Actuary also gave the figures of the estimated deficit in his Report on the Bill now before Parliament, but since that Bill is in Committee I think that I should be out of order if I pursued it any further. The Supplementary Estimate now before us gives details which show that the deficit to which I have referred is larger than was foreseen when the original Estimate was drafted, owing to the higher incidence of unemployment.

Unemployment hits the National Insurance fund in two ways. There is, of course, higher expenditure on the payment of unemployment benefit, and there is loss of income, in that we receive no contribution from the man who is unemployed and is drawing unemployment benefit because he gets a credit in that period. Those two factors mean, as it were, that unemployment counts two on a division.

The Supplementary Estimate totals £25 million. I think that the Committee would wish me to explain that it is made up of additional expenditure on unemployment of £23 million, plus loss of contribution income to which I have already referred of £5 million; against that there is an offset from the expected saving on retirement pensions payable to late-age entrants who qualified for pension in July last year. In fact, larger numbers of these have remained in full-time work than we expected, and, therefore, are affected by the earnings rule. There is, therefore, some reduction in the amount we estimated we should have to pay out.

I do not for one moment minimise the serious effect that unemployment has on the life of the individual, and even more so in the case of the family man. I have had experience of this, but it is not for me to deal with the vigorous measures which the Government have taken and are taking to deal with this matter. [HON. MEMBERS: "Why not?"] They are not the responsibility of my Department. It is for me to deal with unemployment benefit.

Mr. Leslie Hale (Oldham, West)

On a point of order. My right hon. and hon. Friends have put down for discussion a Motion on the question of unemployment, which arises directly, and as I understood it, clearly on the Vote for the National Insurance Fund, which is having to carry a substantial amount of the cost. We were informed that it was intended to be a very wide debate on unemployment and that we could raise the issue. How can we have an effective debate on this vital issue when the Parliamentary Secretary says, "I cannot talk about it, because I come from the Ministry of Pensions"? The Minister of Pensions will say, too, "I cannot wind up the debate effectively because I come from the Ministry of Pensions".

Why cannot the President of the Board of Trade be here? How can we have an effective discussion of this matter? Some Minister will have the duty of replying on one of the most important internal subjects which confronts the country. To those of us who represent constituencies which carry the heaviest part of this burden unemployment is a perpetual worry and concern.

The Chairman

I did not select the Votes for discussion, so I cannot answer the questions which the hon. Gentleman has put to me.

Mr. Hale

Surely I should be in order in moving the Adjournment of the debate, to call attention to the absence of any Minister responsible for unemployment. I am usually told that the Minister of Labour is responsible only for the administration of the employment exchanges. The President of the Board of Trade is the Minister concerned. [An HON. MEMBER: "He is there, too."] I did not see him.

The Chairman

I think that I can see the President of the Board of Trade.

Miss Pitt

As I was saying, it is for me to deal with unemployment benefit and I think I am entitled to point out the value of the present benefits. Unemployment benefit was increased with all other National Insurance benefits in January, 1958, to the highest level ever. Since then the Interim Index of Retail Prices has gone up two points. The benefit remains higher than at any time since January last year. It is conspicuously higher than when hon. Members opposite were in power.

Mr. William Ross (Kilmarnock)

And so are the figures of unemployment.

Miss Pitt

In October, 1951, right hon. Members opposite then forming the Government of the day increased some pensions, not even all pensions, but did nothing at all about the short-term benefits, the benefits for sickness and unemployment. They left the rate at the original 26s. at which it was fixed when the 1946 Act was introduced. In real terms the present value of unemployment benefit is for a single person 15s. 11d. above the 1951 value and, for a married couple, 24s. 11d. above the 1951 value. The provision for dependent children has also been substantially increased. We agree that that is very important when we are thinking in terms of unemployment benefit.

The increase in these benefit rates, of course, constitutes an element in the increased cost of National Insurance and puts the Fund into deficit in any event this year.

Mr. Joseph Slater (Sedgefield)

In view of the statement she made referring to increases in unemployment benefit, will the hon. Lady tell the Committee how much the contribution has been increased since 1951?

Miss Pitt

Certainly; the contributions have gone up when benefits have gone up. This is a contributory scheme, but the increased contributions are not sufficient to meet the increased benefits which we are paying out. The figures in the Supplementary Estimate reflect the increases in benefits to which I have just referred.

It is important to bear in mind that the figures reflect to a much greater extent the improved benefit rates than the reflect—although they are certainly affected by it—the current levels of unemployment. Unemployment benefit is not a substitute for a job of work, but it is a provision against hardship. I am glad that it is a much better provision in these days. The duty of meeting that need and providing for that benefit is laid upon my Ministry. We are very conscious that we are not dealing with figures, but are dealing with people to whom losing their jobs is a personal tragedy. The more we can help them the more we wish to do so, but that provision to help in the form with which my Ministry is charged is now at the highest level. It involves us, therefore, in higher expenditure.

I am sure that after debating this Estimate—as we shall, fully—the Committee will wish to authorise these payments to reinforce our universal system of social security insurance.

Mr. George Chetwynd (Stockton-on Tees)

Is that all?

3.43 p.m.

Mr. Frederick Lee (Newton)

The hon. Lady the Parliamentary Secretary dealt, first, with the size of families and pointed to the fact that they are bigger now. She suggested that was because of the confidence people had in the future of the country. When one thinks in terms of the problems of the next three years, in which the bulge of school leavers is expected to go up by one-third, and when one looks at the position in areas where, at present, employment cannot be found for youngsters who have already left school, it is an exaggeration to talk about confidence in the future.

The hon. Lady dealt with the £25 million under Subhead A which, we are informed in the details, arises as a result of an increase in the level of unemployment". The Committee is now being asked to agree to the payment of that £25 million increase. On the question of unemployment which has increased and for which we are now asked to find extra money, I wish to protest that the Committee is being asked to discuss increased unemployment about which we have no real information. The latest figures available to the House were those for 8th December, 1958, which is more than two months ago. The hon. Lady touched on the question of the £23 million increase in benefits out of the total of £28 million. It is vital to our deliberations that we should know what has happened during the course of the last two months.

I have read the weekend newspapers and almost every one shows that the newspaper world knows precisely what has happened since 8th December; but hon. Members do not know. I do not believe that, as a rule, the Minister of Labour is reticent in producing such information. On the contrary, he is always very good in trying to provide for the House the very latest figures as they become available. The Committee is being treated in a very offhand way. This debate depends in great measure on our having information about the latest position and we are having to debate figures which take no cognisance of the last two months and two days.

It would appear that the Press is well aware of the figures which are to be issued. If, at this stage, the right hon. Gentleman can say anything to us about the reasons why there has been such a long time lag between the publication of the last figures and the present figures, or even if he can tell us, roughly, what is the position against which we are debating unemployment, I am sure that the Committee would be very grateful to him. Such figures as one can obtain of local unemployment certainly show fairly substantial increases. I am thinking, as was my hon. Friend the Member for Oldham, West (Mr. Hale), of the position in Lancashire. I know some of the local unemployment figures there, and they are not very reassuring.

I do not know whether the publication of unemployment figures tends to have cognisance of coming events or not. I do not know whether we have reached a point at which it is necessary to soften up the public before the figures are issued, or to give the impression that they are even worse than they are found to be when they are made available. I hope that the Minister will not form some of the bad habits of the Prime Minister in this respect, but will treat these figures as something to which the House is entitled to have access at a time when we are discussing such important matters as the one we are discussing today.

I have offered to give way if these figures can be given, but apparently no one on the Government Front Bench wishes to interrupt. [HON. MEMBERS: "Answer."] I have said to the right hon. Gentleman that if he is able now to give the Committee even rough figures of the state of unemployment as between 8th December and the latest convenient date I should be very happy to give way.

The Minister of Labour and National Service (Mr. Iain Macleod)

If the hon. Member wishes me to intervene, I shall be happy to do so. As the Committee knows, I have never been reluctant to give figures, but the Opposition did not put either my Vote down for debate—although I have a Supplementary Estimate—or that of the President of the Board of Trade. That is why we thought the Opposition wished the debate to be confined to National Insurance. It is also quite untrue that any of the Press knows the figures. They are being given in detail on Thursday, but I imagine that the Opposition wish to have them now. I have not got them in detail, but I have two key figures which I can give. The overall figure is 620,000 and the overall percentage has moved from 2.4 per cent. to 2.8 per cent.

Miss Margaret Herbison (Lanarkshire, North)

Can the Minister also give the separate figures for Scotland?

Mr. Macleod

The Scottish percentage, I am sure, is 5.4. My impression is—I would not swear that this is right to a thousand—that the figure is 115,000.

Mr. Lee

I am greatly obliged to the right hon. Gentleman for those figures, as I am sure all Members of the Committee will be. They confirm the figures which have been given in the Press during the past few days. [Interruption.] I have been saying that it is not fair that the Press should have such figures before the House of Commons has them. That was the point that I made. It would appear that there has been an increase of about 89,000 unemployed since the figures were given for 8th December, which is one of the biggest increases recorded in the figures which we have had.

This is in some ways a unique occasion. We on this side of the Committee are compelled to concede that the Government have proved themselves more efficient in carrying out their avowed industrial policies than even Ministers themselves anticipated. Hence the need to finance an even higher level of unemployment than they considered possible in March, 1958, which was the beginning of this financial year.

I must make it quite clear that we are not opposing the payment of this Supplementary Estimate. Indeed, as the year for which the Supplementary Estimate is required ends in about seven weeks from today, the question of opposition to it does not, of course, arise. I must make abundantly clear that, although we do not oppose the Estimate, it must not be considered that we approve the policies which made it necessary. This is an issue to which, no doubt, many of my hon. Friends will wish to make reference. We feel that if the payment of £26 million could be considered as the total cost of the Government's folly, and we could discharge both the debt and the Government by granting it, the British people would have transacted perhaps their best stroke of business, even for the bargaining season.

While we cannot hope to impress upon the Government, whose policies have cost the nation about £1,700 million in lost industrial production during the past three years, the importance of a bill for £26 million for those who have been refused the right to continue their production efforts, it is our duty to examine the nature of this problem, even if we do not oppose it.

On 24th February, 1958, which was just before the financial year which is under discussion began, the House had a debate on local unemployment. Very many constructive suggestions to deal with the problem were then made by right hon. and hon. Friends. On that occasion, the Minister of Labour, speaking of Government policy, gave us some idea of their calculations for the period ahead, that is, the period for the financial year which is now under discussion. He said: The two main features of the January figures are that unemployment at 1.8 per cent., although certainly higher than for a number of recent years, is only one-tenth of 1 per cent. higher than the average for the last ten years… Later, he went on to say: We must bear in mind also that January and February are the seasonal peaks of unemployment … Then, in March, or in April at the latest, the seasonal improvement starts."—[OFFICIAL REPORT, 24th February, 1958; Vol. 583, c. 56.] When we are trying to assess how this Supplementary Estimate comes about, we see, by looking at the figures for 1958, that the main reason why we face this Estimate is that the Minister was hopelessly wrong. Indeed, no improvement came about. Looking through the figures for 1958, I doubt whether we ever again, during the whole of that year, got down to 1.8 per cent., of which he spoke in February and which was supposed to be the peak period of unemployment which would then decline.

The figure, at the time when he was speaking on unemployment, stood at about 420,000. At the end of March, it was 430,000; by the end of April, which was the latest date on which he said it would begin to decline, it had reached 442,000; by the end of May it was 460,000; and by the end of June it had dropped to 432,000. The measure of the failure of the seasonal pattern about which the right hon. Gentleman had spoken is shown by the fact that this figure was 182,000 higher than the figure at the end of June, 1957.

After this temporary dip, the line on the graph again turned upwards, and between 14th July and 11th August it rose to 446,000. By 30th October it was 514,000 and after reaching 535,000 at the end of November it declined slightly to 532,000 as at 8th December, which was the latest figure we had available before the right hon. Gentleman was good enough to give the figure which he has just given to the Committee.

The complete failure of that seasonal pattern, which, I agree with the right hon. Gentleman, could usually be counted upon, was one of the major factors leading to the presentation of this Supplementary Estimate. One of the most remarkable things about it, when we ask ourselves why did not this seasonal pattern emerge, is, of course, that it did not emerge because the Government would not let it emerge. They did everything possible to prevent that seasonal pattern from repeating itself while, at the same time, budgeting as though it were bound to happen.

I wish to point to one or two other rather disquieting features of the period under discussion. In a television interview on 23rd February, the date before the unemployment debate, in which he was discussing the first report of the Cohen Committee, the Prime Minister said: The Government could not support a position in which there were five jobs for every three workers. It was blatantly untrue at the time he said it.

On the question which he then raised, of unemployment as against vacancies, quite definitely the position since then has deteriorated very seriously. Indeed, the measure of the failure of the Government to take the steps necessary to obviate the need for this Supplementary Estimate is shown by the fact that vacancies as at 8th December—and my figures have to be based on that—were down to 163,000 as against 532,000 unemployed, or 3½ unemployed to every vacancy throughout Britain. That is the overall position.

Again referring to the right hon. Gentleman's argument in the unemployment debate, when discussing the nature of unemployment and the problem we face he quite rightly pointed to what he called the "have" and "have not" areas. He was, of course, thinking of the old depressed areas, which we all remember so well. He said: I admit frankly that that is an aspect which causes me great concern, because I think that it is the ugliest of all the ugly features of the inter-war years in unemployment."—[OFFICIAL REPORT, 24th February, 1958; Vol. 583, c. 56.] There has been one remarkable change since those days in that there is not a single Ministry of Labour region in the whole of the United Kingdom in which there are not more unemployed than there are vacancies. I am not arguing that by doing that he has merely spread the misery, but, judged by the figures, we still have the misery in those areas to which he referred and it is much worse than it was then.

Indeed, in these areas, to which we were told the Government intended to pay very special attention, the position is now quite appalling. In Scotland, for instance, there are 12 unemployed for every vacancy. No doubt the latest figures will show that the position is even worse. In Wales, for every vacancy there are 6½ unemployed people; in the North-West—my own area—there are 5½ unemployed people to every vacancy; and in the Northern area. including Newcastle, there are 5 unemployed people for every vacancy. In other words, the very areas to which the Minister himself referred as the ugliest of all the ugly features of the inter-war years in unemployment", are now re-emerging as places where, once a man is out of work, his chances of obtaining a job are more hopeless than in any other part of the country.

During the year in which the Government have told us that they have been trying to create vacancies—they have said that that was the prime objective of their policy—we have seen the number of vacancies decline. In July, 1957, there were 330,000; in February, 1958, when these policies began, there were 200,000; in September, 1958, there were 179,000; and in December, 1958, there were 163,000. Much the worst of that position has appeared in the very areas where the Government are supposed to be bringing succour to people who need jobs. I do not know whether the right hon. Gentleman has the latest figures for vacancies, or whether that is asking too much of him. It is a relevant point, hut I do not wish to press it.

I believe that merely to use the Government's new machinery of saying, "Where there is 4 per cent. unemployment we will bring special measures to bear" is not sufficient at all. In many of the cotton areas of Lancashire, for instance, in Scotland and in Wales, such is the lack of ability to get work that there is now a disconcerting drift to the South. We shall never achieve that level of unemployment, as expressed as a percentage, because hopeless people who cannot get jobs are drifting into other areas.

I want to put a different policy to the Minister. I believe that it is necessary, when trying to establish a new policy approach to the problem, to consider unemployment as against vacancies, because only by that method can we see the serious impact of unemployment where people are without hope of getting further work.

The Parliamentary Secretary said that she knew a little about unemployment. Unfortunately, so do I. But I wonder whether we all appreciate what it means to be unemployed in these areas in the conditions which I have been outlining. When a man seeks employment in these areas he goes to factories from which many others have already been turned away. He gets a kind of hopelessness in his quest, what might be described as a kind of finality about his unemployment, which does something to a man's soul from which it take years to recover. This is the sort of problem which we feel that the Government are not attempting to tackle.

I sometimes wonder what sort of response the Minister of Labour would get in these areas to his suggestion to the Tory Party Conference that the Government's policy is not the assassin, but the guardian of full employment". I have heard of some grisly guardians in my time, but none quite as bad as this. The hopelessness of the position in such areas is made completely desperate by the fact that the Government believe that the economy is the sounder inconsequence of these developments. They believe, as I said on a previous occasion, that the soundness of the economy increases pro rata with the increase in the unemployment figures. This theory, I suggest, presupposes that there must be periods in which the Tory Government will, as now, use unemployment in the same way as they use the Bank Rate—as an instrument of economic policy. We on this side of the Committee differ violently from them on this fundamental issue. To us economic policy is the instrument by which men and women are enabled to live a better and fuller life, not an instrument by which Governments spread misery and despondency among working people.

On 3rd November, in the debate on the reply to the Address, I tried to make the point that the enormity of the offence against these unemployed people is not reduced qualitatively by arguing that we have refrained from doing the same thing to two or three million others. I recall that in his Halifax speech, speaking of unemployment, the Prime Minister said: I am determined, as far as lies in human power, never to allow this shadow to fall again upon our country. In practically every one of the old depressed areas not only the shadow but the substance has returned, and emotional reflections of that sort bring very cold comfort to the victims of his policies.

What is the position now? I have given the figures as I see them in respect of the worst areas of the country. I have suggested that the creation of vacancies is a very serious consideration for certain areas, but I am informed that although the Government refuse to de-schedule certain Development Areas, in the way that they are working the distribution of industry policy they have decided to ignore certain types of Development Area. In my constituency, which is largely a Development Area, I have in Haydock—in a Development Area—a firm which has been refused permission by the Treasury to expand under the terms and conditions which the President of the Board of Trade informed us would be considered favourably. If the Government are theoretically producing new Development Areas and at the same time doing nothing to improve the lot of the old areas, we shall not make much progress.

The Parliamentary Secretary to the Board of Trade, in answering Questions a short time ago, gave some figures. I understood him to say that there were some 24 firm projects now arranged which would find jobs for about 2,000 people. Neither he nor the Government, and certainly not the Opposition, can look upon that as a startling improvement. Compared with the figures which the Minister of Labour has just given us, we do not think that they make a serious contribution.

I should like to ask the hon. Member one or two questions about what is going on in those areas. A Sunday newspaper, Reynolds News, for instance, has asserted that much of this failure to get people to go into these areas is due to the high rents which are being charged for Government-owned factories. I should like to know what is the Government's attitude here. Does the hon. Member agree that that is a fact? If so, what do the Government propose to do to offer far more attractive terms for firms to go into these areas than are at present offered? As I have said, to create new Development Areas while doing so little in these matters is playing with the problem. I do not know whether the hon. Member is to speak in the debate, but we should like to know whether there is substance in this criticism and whether we are to see a change in the rentals charged. We should be grateful for any information.

With the end of the credit squeeze we have seen the Government indulge in a great unplanned stimulus to industry in the form of hire-purchase incentives designed to get people to spend next year's income before they have earned it. We have seen the Government emasculate the Capital Issues Committee. If, this year, because the credit squeeze is no longer in force, the seasonal pattern emerges, what happens then?

In that event, we shall see the cycle repeated and later in the year there will be the demand that inflation shall be stamped out. We shall see the return of restrictive measures such as the credit squeeze and high rates of interest, designed to create more unemployment as a means of bringing down prices. This phase, as now, will end with prices higher than they were when the Government began to create unemployment in order to bring prices down. Then, right hon. and hon. Members opposite will find that it is consistent with their loyalty to the Tory Party to mention the name of the right hon. Member for Monmouth (Mr. P. Thorneycroft), or even Lord Cohen. In other words, we shall be asked to agree to another Supplementary Estimate because there has been a rise in unemployment.

I should like, even now, to try to bring home to the right hon. Gentleman and his colleagues the enormity of the wrong which they are perpetrating against individuals. How can we expect a response to appeals for increased productivity from those who are thrown on the scrap-heap when they dare to respond to those appeals?

Mr. Cyril Osborne (Louth)

Nonsense.

Mr. Lee

It is no good the hon. Gentleman saying "Nonsense". I have been one of these people and I know what happens to them under these conditions. The Prime Minister has been to Newcastle and has said that the Tories honour their pledges. Newcastle is a city in which five people are chasing every available job, and yet we wonder that people become cynical under such conditions. The hon. Gentleman must face these facts.

Mr. Osborne

I shall face them.

Mr. Lee

Having generated fear, the nation is bound to reap the consequences. We produce a section of the community which has been humiliated. Under conditions of protracted unemployment, one gets to the stage, as one well remembers, of wondering whether one is quite as good as other people. One uses the back door for fear that people will see one and know that one is unemployed.

If right hon. and hon. Members opposite do not understand that, then they do not know anything about the problems with which we are all dealing. Whereas, some time ago, there were no pre-war fears among our working people, now, because of the Government's policies, fear has returned. When, once more, we need rapid expansion a great deal will have to be done to get people on whom we have inflicted these grievous injuries to agree again that in the interests of the nation their job is to produce for all they are worth. Indeed, it could reach the point which we reached in prewar days, when we talked about the submerged tenth.

A few weeks ago, I said to the Government that merely to try to get back now to the levels of production of a few years ago does not mean that one should get back to the unemployment levels of those days. I instanced the position of the United States, because in May of last year we were told that the recession was over for everybody except the 4,100,000 people who were still unemployed. Despite the claim that the recession was over, last month saw 700,000 more unemployed there with the drive for production going higher and unemployment approaching 5 million.

Mr. Raymond Gower (Barry)

I appreciate the sincerity with which the hon. Gentleman expressed his views, but I wish to ask him one question. When tracing the rise in unemployment, does he take no account of the fact that in this year we have been faced with smaller world trade? Does he take no account of the fact that, compared with almost any other comparable industrial country, we have proportionately the lowest rate of unemployment?

Mr. Lee

If the hon. Gentleman wants to argue percentages of world trade he will find that he is on the wrong end of that argument. Our percentage of world trade was going down consistently during the last six years prior to last year, while our chief competitors were taking much of our share from us. There is not much in the hon. Gentleman's argument, I assure him. We are discussing the greatest single issue in our domestic affairs. I have argued that to the Tories unemployment is an essential instrument of economic policy.

Mr. Gower

Nonsense.

Mr. Lee

That is the proof of what we are arguing about. We, for our part, assert that a correct economic policy is designed to outlaw unemployment. That is our conviction and the nation must decide between us.

4.15 p.m.

Sir Alexander Spearman (Scarborough and Whitby)

The hon. Member for Newton (Mr. Lee) has spoken with very great sincerity. I want to try to answer what he has said. The gist of his speech was that it is the Government's economic policy which is to blame because the seasonal pattern has not emerged. If that was due to a fall in consumption there would be a good deal in his point, but consumption in this country is higher today than it has ever been. If it was due to lower investment there would be something in his point, but today private and public investment, taken together, are higher than they have ever been. It is largely due to international trade.

When my hon. Friend the Member for Barry (Mr. Gower) made an interruption there was a certain amount of jeering. As I have not the figures with me I cannot argue about our proportion of international trade, but no one in the Committee will deny that there has been a falling off in international trade during the past year.

Mr. Alfred Robens (Blyth)

Falling off in our proportion.

Sir A. Spearman

The trade of the world has declined to some extent. What could the Government do about that? They have made a great many freer credits and loans. The falling off in our trade as a result of the set-back that occurred in America is infinitely less than was anticipated. We cannot initiate a world revival in trade, because our reserves are not enough. If the Government were possessed of the vast reserves of the United States they might be able to give such a stimulus to industry as to start a world revival, but that is impossible with reserves at their present level.

Right hon. and hon. Gentlemen opposite must take some share of responsibility for the state of our reserves twelve years after the war. It would have been a very easy, popular and pleasant course if the Government had stimulated consumption to an enormous extent during the last few months. For the time being, they could have taken up the slack, but where would we then have been? We should have been producing more. Therefore, we should have had to import more. If we had switched over from making exports to making goods for the home market, how would we get those exports when world trade revives?

Dr. J. Dickson Mabon (Greenock)

That is a contradiction.

Sir A. Spearman

I hope that an hon. Member opposite will give some answer on that point, because the amount we can export is the bottleneck at present. We have to get the raw materials and we cannot get them without exporting. If we switch over our industries to home consumption, then there will not be an opportunity to sell abroad when demand revives. We in this country must face these facts. I see the hon. Gentleman the Member for Oldham, West (Mr. Hale) in his place. I am sure that he will not like what I am going to say now, but, then, he never does.

Mr. Hale

I cannot agree with that. I like what the hon. Gentleman is saying rather well.

Sir A. Spearman

We must face the fact that there are many places in the world where goods can be made much more cheaply than we make them here. About 200 years ago, we, by our new inventions, succeeded in displacing the East in the production of textile goods. Today, the people of the East, by lower labour costs, are displacing us. What can we do about it? In the short term, of course, we could put on tariffs and protections to protect our Lancashire industries. That would mean making the consumer pay more and forcing our colonial possessions to pay much more than they need. We could do it by subsidy, but we should soon reach the stage when we were ruining ourselves by subsidising everyone.

The future of the country and of employment here depends, in the long run, upon our being prepared to undertake an enormous amount of switching about in what we produce, switching over to making more difficult articles, the things which have a small labour content but which depend upon skill for their manufacture.

Mr. Hale

I was agreeing with the hon. Gentleman's last sentence, but I should like to go back two sentences, if I may. I always listen to the hon. Gentleman, whose approach is very sincere and earnest, with profound attention and certainly not with disagreement.

This is a dilemma which faces us all. All of us want to see colonial development. We all want to see a rising standard of life overseas. If we do not plan it, if we adopt what I will call, for the sake of argument, the laissez-faire method, can we really contemplate a developing Colonial Empire making textiles, bicycles and consumer goods and sending them to this country without any limitation of any kind? If we do that, we lose the ability to help the Colonies altogether. Surely we must plan colonial development in terms of raw material producing and ore producing, which we finance by providing the consumer goods.

Mr. Osborne

But we cannot make them buy our consumer goods.

Sir A. Spearman

The sort of things on which we have depended in the past to build the wealth of our country are things which many people in various parts of the world are now able to produce better than we can. But there are other things which we can produce better than they. I believe that it is the job of the Government not to encourage contracting industries, but to accelerate the expansion of the expanding industries. To do that, and have those changes in industry, there must be some reserves of labour. Obviously, if there were no unemployment whatsoever, it would be quite impossible for any industry to expand.

Mr. Robens

No, it would not.

Sir A. Spearman

If the right hon. Gentleman is prepared to advocate the direction of labour—

Mr. Robens

That has nothing to do with it. The hon. Gentleman is saying that, unless there is some unemployment, there can be no expansion of industry. We can have an enormous amount of expansion in industry by new techniques with the same labour force.

Sir A. Spearman

If we are to build new industries, particularly those industries which depend to a greater extent on skill, then there must be labour for them. We cannot produce labour out of a hat. Is it suggested that we import labour, or direct it to go from one place to another?

Going back to the right hon. Member for Blyth (Mr. Robens), I should like to quote something once said by someone whom we in this House all respect very much, Sir Stafford Cripps. He said that To insist upon the rigid maintenance of the present pattern of employment would be to destroy all hope of full employment."—[OFFICIAL REPORT, 26th October, 1949; Vol. 468, c. 1341.]

Mr. Robens

That, of course, is agreed. With respect, one does not require a pool of unemployment to do what the hon. Gentleman wants.

Sir A. Spearman

But there must be some labour available to move from one place to another. How much there should be depends upon the mobility of labour. Few things are more important in the economic field than ensuring the mobility of labour, that is to say, producing a situation in which labour can be induced willingly to go from one place to another, so that we can have the necessary amount of unemployment reduced to the minimum, which will work.

I should like the Government and the trade union leaders to devote themselves to this subject. On the last occasion I spoke in the House, I asked my right hon. Friend whether more could be done to provide training facilities for those in middle age to move from one industry to another. He replied that that was being done, that extra facilities were being made available, but that the demand was very small. Cannot something be done now, not only by the Government but by the trade union leaders, to encourage the demand for retraining for work in the expanding industries?

What else can be done to take up unemployment in the areas where there is a high level now? Is it possible, by better communications, to induce industries to go there? I have a small example in my own constituency. There is a quite heavy percentage of unemployment in Whitby, but. 25 miles away, at the I.C.I. works at Wilton, there is a keen demand for labour. The only public transport service available is the railway, which takes one and a half hours to do the journey.

The same thing may well apply in many other places. Another thing which may well help the mobility of labour is the Rent Act, because it will make it very much easier for people to leave one house and move to another. When the Rent Act becomes effective, and people can give up one house without the fear of not being able to find another, the mobility of labour will be facilitated.

Mrs. Harriet Slater (Stoke-on-Trent, North)

Does the hon. Gentleman really believe in his heart that the Rent Act will make it easier because people will be able to find houses? That is just nonsense. The houses are not there to be had, and the Government's policy is to cut down the building of houses.

Sir A. Spearman

If a man has been lucky enough to reach the top of the queue and have a house in one place, and he knows that he will not find another, he is very disinclined to move. On the other hand, if he can leave one house and another is available to rent, then he is more likely to move.

Mrs. Slater

But the houses are not there.

Sir A. Spearman

Returning to the controversy I had a few moments ago with the right hon. Member for Blyth, I do not believe that any sensible person wants unemployment for its own sake. On the other hand, I believe that, in a free State, where there is free negotiation of wages and free choice of work for the worker, it is necessary to cut down demand and to make sure that the national resources, in the light of that demand, are in balance with money incomes.

This means that there will be an unfortunate effect in the temporary slowing down of industry and there will be some unemployment. Obviously, if there is a far greater demand for goods than can be met by the supply, any worker will know that he can demand more wages. Most employers will give them because they can push the cost on to the price. Then there follows the spiral, the end of which must be mass unemployment because we are not able to sell our products abroad.

To prevent inflation, any Government in a free State must check demand, and the checking of demand may lead to a certain amount of temporary unemployment. If there is such unemployment, I agree that there will be hardship for the section of the community which happens to be in the, I hope, very small group concerned. The question I ask is this: is it not possible to do something more for such people as a temporary measure? It may be that any increase in unemployment pay would lead to such a discouragement to work that it would defeat its purpose, but it might be possible to offer higher unemployment pay for a short period to alleviate the hardship that those people are suffering through no fault of their own. I hope that the Government will consider the position.

4.30 p.m.

Miss Margaret Herbison (Lanarkshire, North)

I have listened with interest to the speech of the hon. Member for Scarborough and Whitby (Sir A. Spearman). He has put his case in a most reasonable way and very sincerely, but I could not help thinking that he had become a victim of Tory propaganda, particularly when he spoke about the effects of the Rent Act. Rather than helping the housing situation in Scotland, the Rent Act has made it much more difficult.

It would seem, from listening to the speeches of hon. Members opposite and to their propaganda outside—that the Government came to power in 1957. But they came to power in 1951. None of the Ministers seem to take any responsibility for what happened between 1951 and 1957. These were the years of free-for-all and the result is the serious unemployment with which we are faced today.

We are told—and the hon. Member for Scarborough and Whitby has made it abundantly clear—that the policy from 1951 until 1957 could end in nothing but inflation and that the only way in which the Government could deal with inflation was for there to be a great number of unemployed people—in other words, the Government who do not believe in planning have certainly done very well in planning unemployment. No one who examines the facts as they are could come to any other conclusion.

We are told that the Government have been, and are, out to beat inflation. I can remember the years between the wars. I came from a depressed area which is beginning to be almost as depressed as it was then. At that time we had no trouble about balance of payments, but there were between 2 and 3 million unemployed. It seems that the only way by which a Tory Government can solve their financial problems is by creating unemployment.

We know very well what has been happening. I am sure that my hon. Friends will not complain if I deal with Scottish figures. The Minister of Labour today, in answer to a question of mine, made a very serious announcement. In July, 1958, we had a debate on industry and employment in Scotland. In comparing the unemployment figures of February with June, the Secretary of State for Scotland said that unemployment in Scotland had decreased while it had increased in England. He said, rather proudly: …we have been moving against the trend of the South "—[OFFICIAL REPORT, 10th July, 1958; Vol. 591, c. 709.] The latest figures which I could get I obtained an hour or so ago from the Ministry of Labour Gazette for 8th December. Giving one comparison, between 17th November and 8th December, the trend was in the opposite direction in which it had been going for some time. Scottish unemployment figures were increasing much more rapidly than those of the United Kingdom. Our percentage on 8th December was 4.4. The figure given today by the Minister of Labour was 5.4.

That is a very steep increase, but the figure which he gave today is for mid-January and those of us who know what has been happening in our constituencies are afraid that the figure is now higher than 5.4 per cent. All of us would be delighted to learn that that is not so. It means that between 8th December and the latest figure there has been an increase in Scottish unemployment of 19,460 people.

In the debates that we have had the Government do not seem to take any responsibility for the fact that Scotland is suffering more than almost any other area in Britain, but a great deal of the responsibility must rest fairly and squarely on the shoulders of the Government.

I should like to give a number of figures to support my contention. On 8th December, 1958, there were 65,551 men unemployed in Scotand, a percentage of 4.8. I wonder what the percentage of unemployment among men is today. At the same time, there were 27,989 women unemployed, a percentage of 3.7, making a total of 93,540, with an overall percentage of 4.4. I always like to see how other areas are faring compared with Scotland. I find that London, South-East England and the Midlands always have a much smaller proportion of unemployed than Scotland, Wales or the Northern Region of England. I found that for the same period ended 8th December the percentage of unemployed men in London and South-East England was 1.7 as against 4.8 in Scotland, and that the percentage of unemployed women was 1 as against 3.7. The overall percentage was 1.4 as against Scotland's 4.4.

Sir A. Spearman

Can the hon. Lady say in what industries there is this heavy unemployment?

Miss Herbison

I shall deal with that point later.

I should now like to deal with those unemployed for more than 26 weeks—the long-term unemployed, the kind of people about whom my hon. Friend the Member for Newton (Mr. Lee) spoke. In Scotland, 17,170 men had been unemployed for more than 26 weeks at 8th December. At the same time, 5,501 women were unemployed for more than 26 weeks, making a total of 22,671. It is serious for a man or woman to go on week after week with no hope of getting work. I could not agree more with my hon. Friend the Member for Newton when he says that it does something to the very soul of these people. They begin to feel unwanted and that they are of no use in their community. Those feelings permeate the home, and the man and his family suffer great tragedy when unemployment continues for a long period.

There are far more people in London and South-East England than there are in Scotland, but only half the number unemployed for more than 26 weeks and a very tiny percentage compared with the percentage in Scotland. There are even worse figures. In the case of the under-18s, or those leaving school, on 8th December we had 3,261 boys and 2,013 girls unemployed, making a total of 5,274. Mothers and fathers come to me every weekend when I am at home telling me that their son or daughter has been out of school since the end of June last year, but has not had a single day's work.

That is a hopeless beginning for any child in life. Of all the figures I have quoted, this is the blackest and the most serious. If I were to give percentages, we would find that our percentage of unemployed boys and girls is much higher than in any other area of the United Kingdom. On 8th December, Scotland's percentage of the total of unemployed was 17.9, whereas our proportion of the population of the United Kingdom is only 10 per cent. There are other figures which serve to show how serious is the position in Scotland.

I come from Lanarkshire, which is at present the most badly hit area in the whole of a badly hit Scotland. In July last year, the rate of unemployment in what is called North Lanarkshire, which is a very big part of the country, was 6.9 per cent. In December, it was 8.2 and I have no doubt that in view of the increase of which the Minister has told us the figure will be higher than 8.2 in Lanarkshire today.

The hon. Member for Scarborough and Whitby asked in which sectors of industry people were unemployed. It is in the heavy industries that there is unemployment. We in Scotland have an unfair share of the lighter consuming industries. For years, I have been pressing upon the Government that unless we get a bigger share of the industries that produce consumer goods, if unemployment hit us Scotland would be worse hit than any other part of the country.

Sir A. Spearman

Would the hon. Lady not agree that it is the heavy industries which depend upon international trade and, therefore, they are hit first and hardest by reductions in international trade? What does the hon. Lady suggest that the Government should do to counteract this?

Miss Herbison

I accept what the hon. Member says. I began, however, by saying that the Government have been in power not since 1957, but since 1951. My case is that we need the extra money today because of the high rate of unemployment in Scotland. The blame must rest with the Government for not ensuring that there was a better diversity of industry in Scotland than we have today. This is one reason why, in what is happening in the international markets, Scotland has been worse hit than almost any other area.

I could well have a gramophone record to recite the facts concerning industrial building, but the story does not seem to have made much impression on the Government since 1951. In the case of industrial buildings, at 31st March, 1958, the latest date for which figures are available from Government publications, we find that in London and the South-Eastern area 358 projects were under construction, covering 13,987,000 square feet. In the whole of Scotland, the number of projects was 117, covering 5,246,000 square feet.

This means that London and the South-Eastern area, with only one-third the rate of unemployment that we have in Scotland, had under construction about three times the amount of factory space that we were having in Scotland. That seems to me to be a completely wrong balance in trying to bring a diversity of industry to those areas which are so dependent upon heavy industry.

I turn next to the figures for approvals, tenders and factory construction. Subtracting the completions from the approvals, we find that in London and the South-Eastern area, on 30th September, 1958, over 60 million sq. ft. of factory space was either under construction or approved. In Scotland, the figure was 15 million sq. ft. Again. Scotland, in which only one-quarter of the factory space is being built, has three times the unemployment of the London and South-Eastern area. Over all these years, I have been trying to get the Government to realise what would happen to my county, Lanarkshire, and to Scotland if they did not use the Distribution of Industry Act and the industrial development certificates as they were used when we had a Labour Government. The Government have continually refused to do this.

I mentioned that in North Lanarkshire the percentage of unemployment was over 8 per cent. In my own constituency, steel workers have been badly hit. A little over a year ago, the steelworks there was employing about 1,100 men. With the latest redundancies, however, the figure is now around 600. One refractory brickworks, supplying bricks to steelworks, has closed. An old established paper firm has paid off a great many workers and there is no chance of their being taken on because that part of the industry is completely finished.

What about coal? I represent many thousands of miners in my constituency and I find that on 22nd November, 1958, there were 2,800 fewer workers on the colliery books in Scotland than a year before. On top of this, the National Coal Board has decided to close 36 pits in Britain, 20 of which are in Scotland. When the representatives of the National Union of Mineworkers went to discuss these 20 closures with the Coal Board in Scotland, they were told that that was not the whole story and that another 10 were to be closed. In the coming year, therefore, 30 collieries in Scotland will close, 20 because they are uneconomic and 10 because they are exhausted. Of the 20, two are in my constituency and one is on the border.

Some of those who work in these collieries come from the constituency of my hon. Friend the Member for West Lothian (Mr. J. Taylor), but the majority come from mine. We have been told by the Coal Board that this is one of the three areas in Britain where the Board will not be able to find work in the industry for those who are now to lose their employment. What a picture that paints for Lanarkshire and for Scotland!

The President of the Board of Trade has said, time and time again in the House of Commons, and I quote his words from a debate last July, that Generally speaking, however, the new firm nowadays demands a tailor-made building."—[OFFICIAL REPORT, 10th July, 1958; Vol. 591, c. 608.] It is well known that the President of the Board of Trade is renowned for his own sartorial elegance. Everybody knows that he likes beautiful tailor-made suits, but we have proved in Scotland that when factories became vacant a number of reputable firms wanted those factories. They got them, and they did the tailoring work afterwards. They have settled down and have provided important work for some of our people.

I expect that at the end of the debate we shall be told that the Minister of Pensions and National Insurance has no locus standi in the matters which we are now discussing. Therefore, I address myself to the President of the Board of Trade and the Minister of Labour and urge that there should be much more vigorous action in Scotland. The Parliamentary Secretary to the Board of Trade has met a deputation on the question of rents charged for factories. We are awaiting the result of that meeting and I understand that discussions are taking place. I would impress upon him that if the Government really want diversity of industry in Scotland, and particularly in those areas which are so badly hit by unemployment, his right hon. Friend should disabuse himself of the idea that all industrialists want tailor-made factories, and do what every responsible body in Scotland has been asking him for a long time to do, namely, build advance factories. Let the right hon. Gentleman also ensure that when our part of the proposed new steel strip mill is producing steel strip we shall have in Scotland firms which will use that steel.

I do not suggest that all this can happen overnight, or that the things which I have suggested should be done would clear out unemployment next month. I have had the experience since 1952 of telling the Government what would happen to the mining industry in my constituency and of begging the Government to plan for the time when the pits would be closed. The Government did not accept my advice. The planning did not take place and the mines are now closing without other work having been provided for the men in my constituency. To ensure that this sort of thing does not happen when we have the steel strip mill, the cold-rolling part of which is to be built in my constituency, I beg the Government to plan ahead with factory space and make sure that there will be firms ready and willing to use that steel strip.

4.54 p.m.

Mr. R. P. Hornby (Tonbridge)

I am glad to be able to follow in her remarks the hon. Lady the Member for Lanarkshire, North (Miss Herbison). She has spoken strongly, with great conviction and with knowledge, on behalf of her own constituency and of the area which, as she has said, is very hard-hit at present.

I represent an area in South-East England, to which the hon. Lady has referred, which is very much less hard-hit than hers. But I am sure that it would not be the wish of any hon. Member that this subject should be viewed simply from the point of view of one's own area. This problem is very much bigger than that, and it will certainly be no part of my speech to say that my area is all right and, therefore, I am not concerned with what anybody else says. I am certain, too, that that will be the viewpoint of all my hon. Friends.

Before coming to unemployment, which has been the key point of most speeches so far, I should like to refer briefly to the£1½ million of the Supplementary Estimate which concerns family allowances. I believe that we should welcome that part of the Estimate unstintingly and immediately. My hon. Friend the Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance said that the extra £1½ million are needed because of more live births and more staying-on at school. It seems to me that both these things are matters which we should warmly welcome as part of a Health Service which is growing in competence with every day that it exists. In particular, there has been a tremendous advance in the care of children born prematurely in a great many of our hospitals, and that one aspect of medical advance has had some influence on these figures.

More children are staying on at school, though I grant that there is a problem of the school-leavers in many areas, including my own constituency. This trend to stay on is one which we should welcome. We shall need, over the years, more education of higher quality for everyone in the country. On these two grounds; we should welcome the £1½ million concerned with that part of the Estimate. I say nothing of the third reason for needing this extra money, namely, the provision for the third child since I have been a beneficiary in the last twelve months under that provision.

I turn to the £25 million which is needed, in addition to the original Estimate of £14 million, because, as stated in the Supplementary Vote, of the impact of unemployment. We all recognise the sad emotions and sometimes the angry emotions which this subject is bound to stir in us. We also recognise that, however much we should like it, there is no simple, easy answer to the problem of full employment without inflation in this society or in any other society. Despite many differences on policy, both sides of the Committee realise that we have to grapple with this problem and that no one would pretend that he had the final and complete answer which would give us stable prices and a job for everybody without moving from the area in which they live at present.

How should we be tackling this problem? One or two criticisms have been made in the course of the debate. First, there has been the criticism that unemployment is hitting the same old area. Lancashire and Scotland are the examples quoted. We have had the criticism that there is something rather forbidding and foreboding in the seasonal trends which are being established. There has also been the criticism that Government action has been too little and too slow.

I should like to say a few words, first, about the seasonal trend. This is a matter which I find very difficult to say we can cure. There are jobs which are more difficult to do in winter than in the summer. These may be jobs concerned with seaside resorts or with the building trade. These are things which will have their effect on the seasonal figures and I find it difficult to see how it can be otherwise. It seems to me that where employment is seasonal that in itself is a very good reason for wages in that industry being higher for that employment than the wages elsewhere, partly to attract labour to the industries which have those special risks, and partly as some compensation for those risks.

Secondly, on the problem of the same old areas getting into trouble again, there are two possible ways of tackling the situation. Are we really trying to attract industries to those areas, or are we trying to attract labour to other areas where prospects are better? Probably we are trying to do both. All I want to say to my right hon. Friends today is that if there is any feeling that it is more difficult than we had imagined, if it is taking longer than we had imagined, to attract new industries to, say, Lancashire, where it had been suspected for a long time that the prospects of the textile industry were contracting rather than expanding, how adequate an analysis have we got of the factors which are deterring new consumer goods industries from moving into those areas?

Presumably it is not a matter of labour, because labour is not scarce in these difficult areas. Is it, then, a matter of markets nearby? Is it a matter of transport and of access to ports? Is it a matter of the type of buildings available? In our efforts to tackle these problems it would be valuable to have as much information as possible about the factors that may be deterring industries from moving into the difficult areas, so anything we can get on that subject would inform our debates and shape our future policies.

The third point concerns the problem of attracting labour from those areas. The hon. Gentleman the Member for Newton (Mr. Lee) used the word "drift". This word has an ugly connotation; it arouses a feeling of aimlessness. If the movement away from those areas is of that kind, obviously it should concern us. Where, however, one can see labour moving purposefully away to an area which has foreseen better prospects, all of us should encourage that process.

Mr. Hale

May I interrupt the hon. Gentleman? I want to deal with the point about Lancashire if I have the good fortune to catch the eye of the Chair. Surely the hon. Gentleman understands the vital problem of drift. Oldham has today a population of 118.000. It was once 140,000 and, in fact, has gone up slightly over the last few months, because we brought some new industries to Oldham. The tragedy is that, when there is drift, the older people remain, the younger people go, the poverty level grows, the general level of distress grows. The difficulty of paying the rent of large houses becomes greater. The social services run down. All those things have a steady, cumulative, eroding effect on the public life of the community and upon its vitality.

Mr. Hornby

I am grateful to the hon. Gentleman for the picture that he has drawn. I lived for many years not far from his constituency and I saw some of the derelict buildings, which are a shocking sight, quite apart from the human picture painted by the hon. Gentleman. Nevertheless, we have to face the question whether it is always economically the wisest thing to do to move industries to areas which may not be best suited for them to produce economically and effectively.

I am not minimising the need for doing this as much as we can, but we must recognise the dangers that may be apparent if we go too far in the direction of trying to compel industries to site themselves in areas which are known to be economically undesirable, and, therefore, likely to reduce their prospects of providing an adequate and safe livelihood in the long-term for the people they employ.

There is a balance which must be recognised. On the one hand, we should visualise the factors which may be causing employers to move to new areas; on the other, we must see how much more we can do to encourage people to look further afield for employment. The Ministry of Labour has recently increased allowances in that respect. We must ask ourselves to what extent housing is making mobility difficult. We must ask ourselves to what extent existing pension schemes are a factor in immobility. We must ask ourselves how adequately we are tackling this problem.

I have intervened briefly to make those points and I can assure the hon. Lady the Member for Lanarkshire, North that as one who represents an area which, by and large, has escaped lightly, I do not for a moment want to minimise, either to myself or to my constituents, the effects of unemployment elsewhere. This is a national problem. We cannot separate it from the dangers of inflation, something from which many of the older, retired people in my own constituency have suffered acutely.

Inflation produces hardships which are almost equally poignant in many ways. We must try to find answers which do not merely mitigate the present hardship in any one area, but which will enable British industry to be sited in places which will give it its best prospects of competing with world industries and, through its own employment policies, to care as well as it can not only for those in its employment but for their dependants.

Therefore, I am sure there is no quarrel with the Vote we are discussing.

5.7 p.m.

Mr. R. E. Prentice (East Ham, North)

I agree with the hon. Member for Tonbridge (Mr. Hornby) on at least one point, namely, that there is no simple and easy method of reconciling full employment with the avoidance of inflation. I cannot, however, avoid the comment that it does not sound the same thing as the Conservative candidates were saying at the last General Election, or at the election before that.

In fact, the task of reconciling full employment with the avoidance of inflation depends on planning, and there are not two things which must be reconciled but three. Members of the party opposite profess to believe in three things which cannot be reconciled with each other: the prevention of inflation, full employment, and what they call Conservative freedom. I believe that the country can have any two of those things at once, but it cannot have all three at once, and we must choose which two of the three we will have.

Mr. Gower

Is not the hon. Gentleman aware that Conservative freedom in the modern sense involves a large degree of central planning?

Mr. Prentice

I do not agree with that statement. Conservative policy, as it has worked out in practice, has failed to plan, and by its failure has led to our alternating between periods of inflation and deflation, both of which are injurious to the welfare of this country.

I have this comment to make on the opening speech. With great respect to the hon. Lady the Joint Parliamentary Secretary, it is deplorable that the debate should have been opened with a speech which made no reference to the causes of unemployment or to the plans of the Government for dealing with unemployment. It must have been known to the Government that this was to be an unemployment debate and that we should be challenging the Government on their policy.

Miss Pitt

In that event, will the hon. Gentleman please tell me why his own party did not choose either the Vote of the Ministry of Labour or the Vote of the Board of Trade, but chose instead that of my Ministry, which is responsible for unemployment benefit?

Mr. Lee

Is it not the point that we wanted to choose a Vote on which we could have the widest possible debate on unemployment, and is not this Vote of £25 million in respect of increased unemployment?

Miss Pitt

The Supplementary Vote for the Ministry of Labour contains a specific item for increased administration due to the rise in unemployment. Why could not hon. Members opposite have taken that Vote?

Mr. Prentice

I should have thought it was clear that in selecting this Vote from a whole volume we were looking for a problem of current importance, and the one thing of current importance on the National Insurance level, the one subject which would justify a long debate, is the increase in unemployment. That should have been perfectly clear. What the hon. Lady has said seems to be symptomatic of the rather casual attitude of the Government towards this social problem.

I very much enjoyed the speech of my hon. Friend the Member for Lanarkshire, North (Miss Herbison), who referred to the problem in Scotland. She made many comparisons with the southeast of England. I represent a constituency in the south-east, and I want specifically to refer to the position there, not in order to contradict what my hon. Friend said, but to supplement it, since the Committee should recognise that unemployment is increasing all over the country.

Of course, unemployment is worse in some areas than in others, but in those areas where there is a smaller percentage of unemployment than the average, there has nevertheless been a big increase. In the borough of East Ham, registered unemployed in November, 1957, numbered 390, while in the middle of January, 1959, the figure was 780, exactly double the figure of just over a year before. That is symptomatic of what is happening all over the country—an approximate doubling of unemployment.

I emphasise that although the figure of 620,000 unemployed, which was given by the Minister of Labour, is very high, it does not tell the whole story. There is a good deal of unemployment which is not reflected in the figures of people registered at the employment exchanges because of the way in which we work out our statistics.

The figure does not include, for example, married women who lose their jobs and decide to wait and have a look round on their own, who in any case would not qualify for unemployment benefit if they have opted out of the scheme. It does not include elderly people who retire prematurely and might be considered to be unemployed in the real sense but who do not register as such. It does not include very large numbers who postpone leaving school while seeking work. It does not include people who lose their jobs but who decide to look round on their own for a little instead of registering immediately at the employment exchanges. Many people prefer to do that because they know that if they register and then refuse a job which they are offered because they do not like it, they will be disqualified from receiving benefit for six weeks. It does not include large numbers of people at the docks who are merely attending and drawing the statutory minimum amount but who are not regularly employed in the docks.

It does not include the large waste of effort due to under-employment because of lack of overtime and short-time working, which is apparent throughout industry. I have seen recent figures which suggest that in 1958 the cut in overtime in the manufacturing industries represented an increase in unemployment of more than 1 per cent. in those industries alone. That is all part of the price which we are paying for the Government's present policy.

Mr. J. A. Leavey (Heywood and Royton)

Does the hon. Member regard the reduction in overtime as underemployment? In other words, is he suggesting that we should have extensive overtime with all its disadvantages, or that lack of overtime is definitely a symptom of under-employment?

The Temporary Chairman (Sir James Duncan)

That may be a very interesting speculation, but it does not arise under this Vote.

Mr. Prentice

In that case, I will not answer the question, but reduced overtime is another indication of the extent and the way in which the resources of the country in manpower and capital are being under-employed.

Unless the Government change their ways the figures are likely to get worse. The situation which we face is partly due to the fact that we live in an age when changes in industry are accelerated. One reason for that is the increasing pace of technical changes, all the changes included under the heading of automation and so on. Those changes would affect us under any kind of Government. They will mean people losing their present jobs.

Another aspect is the change in the pattern of the defence programme. Among the badly hit areas are those relying on dockyards, Royal Ordnance factories, aircraft firms and similar organisations which have been the main source of local employment. We were told in the Defence White Paper of two years ago that 7 per cent. of the insured population worked in defence industries.

Another change taking place even more quickly is that in the pattern of trade. The introduction of the Common Market in Europe is bound to mean the loss of some traditional exports. If the Free Trade Area is imposed on it there may be compensating advantages, but I cannot anticipate Thursday's debate.

All those tendencies are creating a situation in which people will lose their existing jobs, whatever party is in power. The Government of the day must therefore have policies to meet that situation, and that is where the present Government have failed.

There are two other things which are increasing the difficulties. Both sides of the House are pledged to end National Service, which will mean more young people looking for jobs. There is also the "bulge" coming through the schools, which will again mean more young people looking for jobs. I was rather sad when I read recently that the number of vacancies for boys being notified to the employment exchanges has fallen by 70 per cent. in the last year, whereas the general fall in the number of vacancies has been 60 per cent., so that the situation is even worse for the young people than for the older people.

All those factors increase the need for a Government policy and strategy for maintaining full employment. In the absence of that strategy, the figures which we have heard today are likely to get worse in the next year or two. We should never underestimate the effects of unemployment. I agree with my hon. Friend the Member for Newton (Mr. Lee) about the human cost of this problem in terms of the unemployed man and his family. If there is one unnecessary case of unemployment anywhere in the country, it represents a tragedy for the family concerned, and we should always remember that.

On top of that, we have the tremendous waste of productive effort from which the whole community could have benefited. I quote from a recent article by H. A. Turner of the Faculty of Economic and Social Studies at Manchester University. He said: And since 1955 we have lost the equivalent of three months' total industrial output. Enough—for instance—to build a million new houses or establish a fund to nearly double old age pensions without raising contributions. That is a measure of the social loss which we have incurred through unemployment in the last few years.

There is another aspect which has not yet been mentioned. Because our economy is undergoing changes, because we have to change the pattern of our trade, we have to have a flexible approach to our entire economic organisation. People must be willing to go from one job to another. If there is a psychology of fear, if people are afraid of losing their jobs, if they are afraid that if they do lose their jobs they will not have other jobs to which to go, or that they will have to wait twelve months to get another job, which may be inferior, they will be unwilling to consent to arrangements to bring industry up to date.

There is always a psychological reluctance to change one's ways, a sort of inertia, an unwillingness to go into a new environment. If on top of that we impose unemployment, the economy will not be sufficiently flexible to stand up to the challenge which we will have to face in the coming years.

Although we are going to have a reply from a Minister of the wrong Department, I hope that he can at least give us some indication of the policy of the Government for meeting this challenge. I want to remind him of the information which the House has been given recently about the working of the Distribution of Industry Act shows that the policy in itself is completely ineffective in dealing with this problem. We were told by the President of the Board of Trade recently that between 500 and 1,000 new jobs would result from the applications already approved for factories set up in special areas. That is between.1and .2 of 1 per cent. of the total unemployed throughout the country.

The fact is that this policy is completely ineffective unless it is carried out against the background of an expanding economy, and, on top of that, having got an expanding economy, we need a Government which will plan drastically in these areas of unemployment and be prepared, if necessary, to go in themselves, build factories and enter into competition in industries where private enterprise is not virile enough to do it itself. It means a Government prepared to give priority to public works in these areas of heavy unemployment on the building of roads, hospitals and other things which are so badly needed, but which have been so badly neglected.

I seem to remember the late Lord Keynes saying that it was better to provide any work for the unemployed than to leave them in idleness. He said that rather than leave them to do nothing it would be better to set half the unemployed on digging holes and the other half to work on filling them in again. It is clear to anyone who looks at the social problems of this country that there are far more constructive things that we could do than that. [An HON. MEMBER: It sounds like the Preston by-pass.] Seriously, the point Lord Keynes was making was a good one. Anything is better than prolonged idleness. Even so, there are a lot of social projects waiting to be carried out, which need to be done.

There is one other aspect of the problem to which I want to refer. I go back to the Estimates and to the figure of £25 million extra which is required for this purpose. The hon. Lady, in opening the debate, spoke with some pride about the level of unemployment benefits now being paid as a result of Government policy. I think that the country, and certainly those of us on this side of the Committee, will feel very tired of hearing hon. Members on the Government side boast of the high level of social payments. We have heard it too often in regard to retirement pensions, and we have heard it today again in regard to unemployment benefits. In fact, all these comparisons that are made with 1951 are based on the Official Index of Retail Prices and neglect the problem of people living on low incomes whose pattern of spending is different, and also neglect the fact that the prices of food and other necessities play a bigger part in their spending. The prices of these things have gone up more than price levels generally.

Even allowing for that, there is nothing very much to boast about the fact that in 1959 we have a higher level of these benefits in real terms than there was in 1951, which was only three years after the scheme first came into effect. If the Government could boast of an advance in social services equivalent to the advance made under the Labour Government, which first introduced comprehensive social insurance, then they could make legitimate political points out of this, but, taken out of its context, this argument is artificial and convinces no one.

These levels of benefit which are reflected in the figures are really very inadequate for anyone who is unemployed at present. If we had a full employment policy in this country, we on this side would have to face frankly, for the reasons which I mentioned earlier, the fact that many people would lose their existing jobs and would have to go to other jobs. A full employment policy means having other jobs available for them to go to. During that period of change, hardship cannot be avoided because of the fact that people will have built up standards of living based upon the wages to which they have been accustomed.

These things are needed urgently. First, that the basic level of the unemployment benefit should be raised to at least £3 a week. Secondly, just as we on this side have said that retirement pensions should be reviewed at least once a year in relation to the cost of living, the same should apply to unemployment benefit, and that is something on which we should like to hear the views of the Government. Then, again, unemployment benefit should be on a more long-term basis. I do not want to speak too long and I think some of my hon. Friends may have something to say on Section 62 of the National Insurance Act, and the fact that, after a limited period, people can no longer get unemployment benefit, but have to rely on National Assistance.

On this question, I believe that a firm for which a man has worked for some years should do something for him. When a man becomes unemployed, because of technical advances which have benefited the firm, a man who may have given long years of service to that firm can be dismissed on a week's notice, and have to rely on unemployment benefit. Some form of compensation, paid by the employer, ought to apply in these cases. I think that it is a matter for debate whether this is best dealt with by legislation or by agreement between the unions and the employers concerned.

Mr. Osborne

I wonder whether the hon. Member would agree that most modern and humane firms give their workers the maximum amount—

Dr. Dickson Mabon

That is begging the question.

Mr. Osborne

The majority of modern firms—[HON. MEMBERS: "No."] I am speaking, as I hope the House will agree, with some experience, and I say that the majority of modern firms treat their work-people as fairly as their finances will allow. [HON. MEMBERS: "Oh."] They cannot spend what they have not got. They treat their people as fairly as their finances will allow, and the hon. Gentleman should admit that that is the modern method.

Mr. Prentice

I think it is begging the question, and might lead to a discussion on how many employers are modern, how many are humane and how many can afford to do it. I suggest that the community as a whole should recognise this as a right, that people, after having given many years of service in a particular firm, should have something better than seven days' notice, followed by 50s. a week unemployment benefit. I agree that some people—I do not know what the figures are, but I should be grateful to hear some precise figures from the Minister—get more, but there were not sufficient who get it.

In all these things, what we really require is a new strategy by the Government which plans not only to defeat unemployment but deals more humanely with the people affected by it. I believe that the attitude expressed from the Government benches this afternoon has been an entirely negative one and that in this situation in which they cannot themselves produce any policy to deal with this difficult human problem they ought to resign and make way for a Government who will tackle it.

5.28 p.m.

Mr. Raymond Gower (Barry)

I think it is possible that hon. Members who have spoken from the other side of the House may be unduly apprehensive about future developments in the unemployment picture. I would be the last to deny the reality of unemployment or, indeed, the more unfortunate aspects of unemployment. Indeed, I was brought up in an area which suffered very heavily before the last war when most of the world was suffering very heavily from unemployment.

I cannot help thinking that some hon. Members opposite are still in the state of mind of the right hon. Member for Blyth (Mr. Robens) when, in 1952, when steps had to be taken to deal with our financial difficulties at that time and unemployment rose somewhat, he prophesied a level of a million unemployed before Christmas. I am afraid that some hon. Members opposite may have got into that state of mind. I recognise that there are parts of the country where there are particular problems, and that these, of course, have been aggravated in some parts of the country by the difficulties of the older coal mines which the National Coal Board has decided to close down.

Taking the national picture, I think it would be as dangerous to be unduly pessimistic as it would to be unduly optimistic. It is a problem that we must face, and it is one which I believe the Government are facing, but the steps which they have taken may take as long to be effective as the steps which they took to deal with inflation. Two years ago the Government took the first steps to meet the danger of inflation. I well remember, as the weeks and indeed the months went by, wondering whether those steps were adequate, so slow were the results, but in due course they had the effect that was desired. Whatever arguments there may have been between hon. Members on either side of the House about the policies and methods, I think it can be agreed by anyone who takes an objective view of the problem which then existed that there was a radical improvement in the situation and a solution of the inflationary problem in about a year.

Dr. Dickson Mabon

Surely the hon. Gentleman is arguing that inflation began in 1957. According to the index of prices and the real value of money inflation has gone on since 1951, and this despite Conservative promises. But even if the hon. Gentleman is succeeding in making his point—I am willing to admit that prices have risen consistently since the end of the war under both Governments—he must admit that inflation has persisted since 1951 and not since 1957.

Mr. Gower

I readily admit that of course there has been inflation since 1951, and inflation since 1945. I believe that there has been inflation since the Elizabethan age, if the hon. Gentleman wishes to go back as far as that.

I was speaking particularly about the aggravated form of inflation which seemed to affect most of the free countries of the Western world in 1956 and 1957, and I think that the hon. Gentleman realises I was referring particularly to that period and the problems which then arose. Certain steps were taken by the Government to deal with those problems, and it seemed a long time before we saw any result from them.

Similarly, steps to deal with the different problems of unemployment have been taken in recent months by the Government, and I can capitulate some of them. There was the lowering of the Bank Rate; the easing of credit; the decision taken by many Government Departments to increase expenditure and, in some cases, a decision to alter the form of expenditure.

Mr. Hale

The hon. Gentleman is making an important point. I gather that he maintains that it helped the situation by reducing the Bank Rate which we put up; that it helped the situation by cutting a little of the credit we could have; that it helped the situation by increasing expenditure, when the retiring Chancellor of the Exchequer said that if expenditure were increased to £100 million, ruin and devastation would be brought on the country. The result is that if we had not had a Tory Government at all, and none of these things had been done, everything would have gone on perfectly well.

Mr. Gower

The hon. Gentleman should realise that there is nothing strange about what I have said. Had he been eating large meals every day, it might do him good to go without for a day. There are variations in the affairs of nations just as in the affairs of individuals. Anyone who goes all out all the time finds that sometimes it is a good thing to stay in to have a rest. For those reasons, it is not strange to suggest that sometimes in the history of a nation steps have to be taken to deal with inflation; and at other times it is proper and pertinent to take steps to increase industrial activity. I see nothing strange in that theory. The hon. Gentleman may make fun of it, but I think it is consistent with the past history of this country and I believe that it will happen again in the future.

I was suggesting that it will probably be some time before the steps taken by the Government show results. Certain Departments have increased their spending. Certain State-owned industries have announced plans for expansion. There will be an acceleration in the modernisation of the railways. My right hon. Friend the Minister of Transport and Civil Aviation has agreed to some increase in the road building programme. My right hon. Friend the Minister of Education has announced a substantial increase in school building. All these things will help to increase industrial activity.

In the private sector of industry the easing of credit terms and the lessening of hire-purchase restrictions will also lead to increased activity, but I must reiterate what was said by my hon. Friend the Member for Scarborough and Whitby (Sir A. Spearman), that it would have been impossible for this nation, any more than for any other country, to have contracted out of the conditions of world trade as they existed in the last eighteen months or so. The astonishing thing is not that we have done so badly, but, in all the circumstances of world trade in the last eighteen months and despite a large American recession, that the effect on our industrial activities has, comparatively speaking, been so modest. That is the thing we should emphasise and, in that spirit of hopefulness, we should look to the future.

In the last year or so it has been demonstrated that, contrary to the belief of many hon. Members on both sides of the Committee, we can suffer the consequences of a large inflation on the other side of the Atlantic without it having a fatal effect on our own economy. That is a most hopeful sign and something about which we should be glad.

I wish to say something about the actual terms of the proposals regarding unemployment benefit. My hon. Friend the Joint Parliamentary Secretary suggested, and I agree, that the payments made to unemployed people are better than they have ever been before. But, with respect, I suggest that she and my right hon. Friend should view that against the setting in which the payments are made. I suggest that people have been earning better money in recent years than ever before, and, therefore, when a person becomes unemployed, surely it is a greater deprivation, when he loses good employment where he has been earning high wages, than would have been the case in the past. To that extent, there may well be a special problem in the special areas. My right hon. Friend the Minister of Pensions and National Insurance and my right hon. Friend the Minister of Labour and National Service should, in my opinion, regard this in a different fashion and make new assessments of the position.

Here we have people earning higher wages than were contemplated in the past. In many cases, those people in the special areas have to go through a prolonged period of unemployment. Is not there a case in the special areas, where the unemployment figure is over 3 per cent., for a higher rate of unemployment benefit for people who have suffered from a prolonged period of unemployment through no fault of their own but because of the shortage of work in the locality? I know that my right hon. Friends the Minister of Pensions and National Insurance and the Minister of Labour and National Service have not closed their minds to this. My right hon. Friend the Minister of Labour and National Service, when dealing with Section 62 in the past, has indicated that he has an open mind about this problem.

I suggest that there is a case for introducing some formula, in addition to the terms of unemployment benefit, which ends after a specified period, if this very high proportion of unemployment persists for a long time in the special areas. I throw out these ideas to my right hon. Friend. This matter should not be compared with the problem which faces the whole country because it is a special problem peculiar to particular localities. If there are these high rates of unemployment in particular areas, there may be a case for such a special formula to be applied to the areas. In other areas, where unemployment is lower and the number of jobs available is far larger, I do not think there would be the same need for such a formula to be applied.

The hon. Lady the Member for Lanarkshire, North (Miss Herbison) mentioned one such area and there are two others in North-West Wales and South-West Wales. I hope that some special formula may be devised for them. I also suggest that there may be a case for better travelling facilities and for the payment of special grants for people who have to move from their home area to obtain work elsewhere. Surely that is not an unreasonable proposition, if we wish to encourage people to secure work. More generous grants should be made to them, not only for travelling but to meet the added expense of residing in other areas for a period.

I hope that we shall hear something tonight from my right hon. Friend about the points which I have made about the payment of benefit. I am sure that my hon. Friends will have not hesitation in approving the payments and that hon. Gentleman opposite will agree to them.

There is the danger that if all of us appeal for special treatment for our own areas—quite a natural and human thing to do—in an effort to have them designated as Development Areas, and if every area then becomes a Development Area, there will be no Development Areas at all. We should spread the treatment so thinly that there would be comparatively no benefit. Areas which have a threat of unemployment should receive the special benefits which were devised under the Distribution of Industry Acts and the Distribution of Industry (Industrial Finance) Act. I support the Motion.

5.43 p.m.

Mr. James H. Hoy (Edinburgh, Leith)

We should remind ourselves what the Vote is about. Surely, if what was said by the Parliamentary Secretary is correct, the Supplementary Estimate has nothing to do with increased benefits, but is necessary because of increased unemployment That is its sole purpose.

I am sorry that the Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance is not here at the moment. I found some of her remarks a little contradictory. The hon. Lady sought to convey to the Committee that she felt this to be a human problem, and then she went on to quibble whether the debate was taking place under Subhead A, B or C. I am sure that the Minister will agree that it does not matter which subhead it may be on; it gives us an opportunity to deal with a human problem. Nor does it matter to the unemployed man under which Vote the debate is taking place because—

The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter)

My hon. Friend the Joint Parliamentary Secretary is not here at the moment. She and I are anxious to accommodate the wishes of the Committee and we will try to deal with these matters on the basis that the Committee wishes. My hon. Friend made the first speech, before any other hon. or right hon. Gentleman had spoken, and I must say, in fairness to her, that she would have been subject to criticism if she had not confined her remarks to the Votes which hon. Gentlemen opposite tabled for debate. I hope that they will not hold it against her that she made speeches which were perfectly legitimate on that Vote.

Mr. Hoy

I was saying that there should not be these quibbles about which Vote the debate was taking place under. This is a human problem which affects some parts of this country, but it concerns the whole country of Scotland.

It was suggested by the hon. Member for Scarborough and Whitby (Sir A. Spearman) and the hon. Member for Tonbridge (Mr. Hornby), that one solution to the problem of unemployment might be mobility of labour, but that would not benefit us much in Scotland. It does not matter to which part of Scotland we move, we find unemployment. I heard that suggestion before when we were discussing the question of people drifting South. If there were sufficient transport there would have to be a good road, unlike the Preston by-pass, to carry the number of people who have been compelled in the last ten years to drift from Scotland to England.

We have been losing, on an average, rather more than 24,000 people to England from Scotland in the past ten years. In 1957, we lost 32,500, which was the highest figure for the last thirty years. Despite this continuous drift from Scotland to England, we have an unemployment problem in Scotland of 150,000, or 20,000 more than the last figure published. On top of that, we have part-time working of 16,000. The figure is for the end of December. In other words, there are four people on short-time working for every person we had a year before. The problem is exceedingly great for us.

I remember raising this matter when I had the privilege of opening a debate for my right hon. and hon. Friends in July last year, and when I sought to convey to the Government what the position would be in Scotland. I invited them to take action in time to prevent it happening. Some Government supporters criticised me for painting too black a picture. By the way, there is not a single back bencher representing Scotland sitting on the Government benches at present. My hon. Friend the Member for Lanarkshire, North (Miss Herbison), who addressed the Committee, came in for a great deal of criticism from Government supporters although she only said that unemployment would affect Scotland more than any other part of the country.

That is what has happened. My hon. Friends who represent Welsh constituencies always think of Wales as a black spot, but Scotland has now usurped that position and is one of the blackest spots in Britain. Last December the male unemployment rate was greater than for any other section of Britain. Unemployment over the whole of Scotland has gone up to 5.4 per cent. In the Lanarkshire industrial belt we have an average rate of 8.3 per cent. I am surprised that there has been reticence about the figures, because the figures which the Minister announced in response to an interjection were given by the Department for Scotland on Sunday. The Minister only confirmed this afternoon that they were absolutely correct. They were given to people who were not in this House. It is difficult to understand, if the figures were available, why they were not disclosed to the House of Commons.

Let me give comparative figures in the Lanarkshire area. The unemployment rate varies from 7.8 per cent. in Hamilton, to 10.9 per cent. in Belshill. Therefore, the best possible area is Hamilton, which is in the industrial belt of Scotland and upon which we depend very much for our economic prosperity. Faced with that position, we obviously cannot think the future is very bright.

It has been suggested that one of the reasons why unemployment has gone up is that the Government have had to restrict exports. Various excuses have been made for Government policy. I read an interesting report made by a Conservative back bencher. He said that the reason why we had growing unemployment was Government policy. I support the hon. Gentleman. If my hon. Friends want to know who the hon. Gentleman was I will tell them. He was saying that the reason why we had increased unemployment was that the Government had to keep down the cost of living, and that the only way to do that was by increasing the number of unemployed. However, unemployment has not had that effect upon the cost of living, which is the highest it has ever been in our country. It is easy to keep it at the higher level.

Let me quote what the hon. Member for Argyll (Mr. M. Noble) said, according to the Scotsman, on 2nd December, 1958: In order to keep a stable cost of living the Government had to be prepared to have some degree of unemployment,… He told a meeting of women Unionists: 'If, by stabilising the cost of living we have done a good deal to help the country as a whole, it is equally true to say that we have caused the great misery of unemployment to an extra one and a half per cent.' If, continued Mr. Noble,"— the hon. Member for Argyll— in order to benefit 981½ per cent. of the population, it was necessary—for a short time—that one and a half per cent. should suffer the misery and inconvenience of unemployment, surely that was right. That was the hon. Member's philosophy. He was saying to that meeting of women Unionists, in Glasgow, "Let us have a little more unemployment and the rest of us will live a much easier and more comfortable life." If that was true of 1½ per cent. we should now be living in luxury, because Scottish unemployment has gone up to 5½ per cent. It is an awful commentary that an hon. Member—from Scotland, of all places—should suggest that the one way in which we can have a better standard of living is to create unemployment in the rest of the community.

Mr. Osborne

Has the hon. Member given my hon. Friend the Member for Argyll (Mr. M. Noble) notice that he would refer to his speech? I should think that it would have been fair to have done that, so that my hon. Friend could be here to reply.

Mr. Hoy

This is a debate on unemployment, and unemployment in Scotland is 5½ per cent. Every hon. Member is free to come into this Committee or to stay away. I cannot be responsible for the fact that not a single Scottish Tory on the Government back benches is present. I should have to have given them all notice. Maybe they will get notice—notice to quit—because of their behaviour tonight.

Even the hon. Member for Glasgow, Scotstoun (Sir J. Hutchison) said in our last debate on unemployment that we should not be worried if unemployment was about 2 per cent. Perhaps that is not a worry, but I should have thought that now it has gone up two and a half times that figure he might have been present to express his concern. I suggest that this is what we have to tackle.

I was a little surprised to find that even the Chairman of the Scottish Unionist Employment in Industry Group is not present to express his concern. He made an attack on me in the debate last July, when he said that I had painted too black a picture. He said: The position in Dundee and Greenock has been given undue publicity. The position there demands attention, but the worst position is that in the Development Areas. The figures for Scotland would he infinitely better but for those of the Development Areas."—[OFFICIAL REPORT, 10th July, 1958; Vol. 591, c. 668.] The hon. Member was suggesting that if only we could get rid of unemployment in Development Areas and in Dundee and Greenock we should have no problem. That does not seem a bright suggestion. Even so, it does not apply tonight, because in cities like Edinburgh and Aberdeen, and in other parts of Scotland, unemployment continues to increase.

For a considerable period we have been suggesting to the Government that if they are to do anything worth while in Scotland they have to diversify Scottish industry. It has been said to us: what suggestion do you make? We suggested that advance factories should be built. We think that that would prove beneficial to Scotland and other unemployment areas. Should we reverse Government policy? I should say, yes. During the days of Sir Stafford Cripps and the Labour Government, for every 2 sq. ft. of factory space built in Scotland there was only 1 sq. ft. built in London and in the South. As a consequence, we attracted new industry to Scotland and tonight thousands of people are in employment as a result of the policy of the Labour Government, under Sir Stafford Cripps.

Since this Government have taken power, the position has been reversed. In this so-called free-for-all for building, 2½ ft. of factory space is built in London and the South for only 1 ft. in Scotland. That is the task we have to tackle if we are to solve the problem, not only in Scotland, but in Wales and other parts of the country. We have to build advance factories. I am not carried away by stories about the Government bringing forward £3 million or £4 million worth of work. Even if the whole of that £3 million or £4 million was paid out without any cost of materials and profits, it would pay the unemployed in Scotland for only four or five weeks. So its impact could be nothing at all on the unemployment position in Scotland.

We need to have greater schemes to deal with Scotland as a whole. If we are to solve the problem we not only need to have a short-term view of it, but a long-term view as well. If we are to be saved from recurring depressions we need a long-term plan. We have to have manufacturing industries producing the things which people are consuming. As my hon. Friend the Member for Lanarkshire, North said, if there is to be a strip mill there, although we are grateful for it, it will make no contribution unless we have factories in Scotland which will use the material it produces to manufacture consumer goods. The same applies with synethetics, rubbers and plastics. We attracted the production of chemicals to Grangemouth, but we have not set up a manufacturing industry to use what those great combines are producing. That is a job which has to be tackled to solve Scotland's unemployment problem.

I very much regret that even at a time when unemployment is growing the Board of Trade has taken action to increase the rent of people engaged on the industrial estates in Scotland. That could not be in the least helpful. The only consequence of that action has been that certain people in those industries have written to the Board of Trade saying, "If that is all you can do we shall just close." I will give an example. The Board of Trade knows about this.

During the Recess, the Industry and Employment Group of the Scottish Labour Party, of which I am Chairman, had meetings with the Scottish Development Council, the Scottish T.U.C., the Scottish Board for Industry and the Lord Provost of Glasgow. We came across many of these cases. One firm, not a big one, was employing 150 people on the Millington Estate, in Glasgow. The present rent is 1s. 6d. to 1s. 7d. a square foot. The Board of Trade has said that as from a certain date the rent will go up to 3s. 9d. per square foot. The gross profit of that firm is £7,000 and the Board of Trade has asked for an additional £4,000 in rent.

Does the Board of Trade think that firms will keep going in that way? The managing director wrote to me and said that he would not be bothered with it, but would close the firm and put the 150 men off because he was not going to run a factory merely to pay rent to the Board of Trade. One would have thought this was the wrong time for that action to be taken. Many other firms have taken the same view. I have had a promise from the Board of Trade that it will take a speedy decision. I am told that it is in a position to do so now. We want to know whether it is going to take that action soon.

The picture in Scotland is black. I do not want to overpaint it, because I know that in these figures there will be a certain amount of seasonal unemployment, but the position is very bad. Scotland looks to the Government to take action immediately to get us out of the morass in which we find ourselves.

6.0 p.m.

Mr. Anthony Kershaw (Stroud)

I am afraid that I enjoyed the speech of the hon. Member for Leith (Mr. Hoy) rather less than I usually enjoy his speeches. It seemed to me to have been manufactured largely for the local newspapers and to have been an attack on fellow Scottish hon. Members rather than an address to the Committee on this important question of unemployment.

The fault which I find with the speeches from hon. Members opposite is that nowhere in them is the idea pursued sufficiently far to give an answer to the problem—which, after all, is surely the answer which the country has to look for—of what we are to do with the extra products and activities which we would produce if we had absolutely full employment all the time.

That question arises in our country because we export 30 per cent. of all the things we make. It is quite idle to pretend that we can go on making them if foreigners will not buy them. As my hon. Friend the Member for Louth (Mr. Osborne) has said before in the House, there is no recipe for compelling foreigners to buy British goods if they do not happen to want them. Hon. Members opposite come up to this hurdle every time in their speeches and then turn away from it and refuse to say how we are to get over it.

It is quite idle to stockpile or engage in activities which demand a large outpouring of capital which will add to the inflationary position over here and make it more difficult and not easier to compete with foreign trade and bring about a catastrophic fall in our economy which will be no help to unemployment in this country. What are the main measures which hon. Members opposite propose at the present time?

Mr. Ernest Popplewell (Newcastle-upon-Tyne, West)

From 1951 onwards when there was an expanding world market our share of the market constantly fell. Although world raw material prices fell considerably from 1951, we were still trying to export goods at a considerable increase on 1951 prices even though raw materials had fallen so rapidly.

Mr. Osborne

May I remind the hon. Gentleman that if the under-developed countries are to be industrialised, as we all wish them to be industrialised, so as to increase their standard of living, our share of world trade must fall.

Mr. Kershaw

I am obliged to my hon. Friend. Of course it would have been better if our total percentage of the expanding world trade had kept pace. But it must be remembered that some countries started from a very low backline. Japan and Germany and other less developed countries in starting up industrial development must increase their share of world trade if they are to utilise the new machinery and industry which they have. Our position vis-à-vis even Western Germany is a favourable one. We continue to export more than Western Germany does, although statistics show that the increase which Western Germany has made recently is so phenomenal that one can hardly expect anyone else to export anything. Nevertheless, we export more.

Mr. Popplewell

The hon. Gentleman has not answered my question. The point I am trying to make is that from 1951 to 1958 there has been a fall in world raw material prices. During that period, instead of our export prices bearing comparison with the fall in import prices, our export prices have been consistently rising. Is there any wonder under such circumstances that we are losing our percentage of world trade?

Mr. Kershaw

I have just said that we are losing a percentage of world trade but that is due to an entirely different cause which I do not wish to repeat.

Moreover, raw materials have gone down between 15 and 20 per cent. but that represents only one part of the cost of goods and the reason our prices have not fallen by exactly the same amount as raw materials is that the cost of production, including wages and the cost of the Welfare State in this country, has gone up.

Mr. Popplewell

So has the cost of living.

Mr. Kershaw

That has gone up by only 2 per cent. in the last year. Moreover, our prices have not risen more than those in any other industrial country in fact we are still fully competitive. It is the object of the Government to make sure that that position continues so that we are able to continue to pay our way in the world.

What are the measures which hon. Members opposite propose to cure the situation? The main measure which they propose is more nationalisation. Nationalisation as such has absolutely nothing to do with production. The question of the ownership of the business has nothing to do with the amount it produces. Even if it had, what could nationalisation do about exports, which represent the fundamental problem of this country? Our experience of every nationalised industry shows that the exporting industries are the last ones that ought to be nationalised, and nationalisation could not possibly cope with the development necessary to continue our export trade in order to stop unemployment.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

The hon. Gentleman is making a very interesting argument about the export trade. The export trade may go up or down. Is there any reason, if it is going down, why the Government should push industry further down in this country by the credit squeeze, especially when this prevents the nationalised industries from re-equipping themselves to make themselves efficient when production rises again? Surely we should be re-equipping our nationalised industries, but the Government, instead of doing that, pushed those industries down at the very time when a recession was taking place.

Mr. Kershaw

That is exactly what the Government are doing by the modernisation of the railways and the increase of the amount of money available for the mines and so forth. That is exactly the policy which the right hon. Gentleman has been advocating. Because of the recession which has occurred in industry in this country, the Chancellor of the Exchequer is making more money available to the nationalised industries. I am glad to know that there is no difference between myself and the right hon. Gentleman on that.

What are the proposals which the Labour Party have for dealing with the unemployment situation? Surely the only proposals they put before the country must have an inflationary effect. I do not think that that is seriously denied on either side of the Committee. They say that they will fight inflation in various ways; their proposals will have an inflationary effect in the first instance, but they will seek to overcome inflation as they go along by a system of controls. The measures they propose are not economic measures at all. Nationalisation is not an economic measure. It is a measure for political ends with which some people agree and some do not. It is a political and not an economic measure.

It is sad that it should be so, because it will bring economic consequences in its train which will in the result mean a very great increase in unemployment. Further nationalisation will in fact increase unemployment in this country. I am sure that hon. Members opposite fail to appreciate that we are not a closed economy. We are not like Russia which can put up political barriers and operate entirely within its own frontiers without the pressure of public opinion. Nor are we like France which, due to a happy combination of national and natural resources, can afford to live of its own. We are dependent to the extent of 30 per cent. of the production of the country on the export trade.

I ask again, what is proposed by the party opposite when we come to this bogy of unemployment which is so unfortunately with us? The only answer that we have had this afternoon is that something must be done; that we must have full employment. But how? I say again that if we are to go for full employment absolutely regardless of the consequences, stockpile goods which we cannot sell in the export market and invest in vast capital expenditure in order to undertake public work of one sort or another, it will mean in the end that inflation in this country will be so great that we shall not be able to compete in the world market and not be able to maintain our economy.

We cannot do that kind of thing, with this great outpouring of money, in the present state of our reserves. It is impossible for us to finance the raw materials of the world. As my hon. Friend the Member for Scarborough and Whitby (Sir A. Spearman) said, it might be possible if we had reserves comparable with those of the United States. It is not possible at the moment and if we insist on adopting such a policy, we shall ruin ourselves and be unable to buy our imports, and that would be no service to the unemployed. In the long run our trading position must depend upon our reserves, and if we do not have the reserves necessary to finance our foreign trade and to maintain the confidence of the foreigner in the amount of business we shall do, I am certain that unemployment in this country will rise to a high figure.

We have heard today about the desirability of diversification, and I am sure that the great industrial areas of this country would much appreciate greater diversification. In the Stroud area we are happy to have a large amount of diversification. Unemployment in Stroud is only 1.8 per cent. Next door, in Gloucester, a large Ministry of Supply factory previously on aircraft work has fallen vacant, but we have been fortunate to have Board of Trade intervention and to get British Nylon Spinners to come there. Eventually they will employ 2,000 people on that site.

Dr. Dickson Mabon

This is very important. Is the hon. Member correct in saying that the Board of Trade offered this Ministry of Supply factory to this firm when people all over the country have been crying out for the firm to be sent elsewhere? Has it been directed to this area, where there is no heavy unemployment?

Mr. Kershaw

No. If I gave a wrong impression I apologise. I did not mean to say that the Board of Trade had directed the firm there. This was one factory on the Board of Trade list, as all factories which fall vacant are on the list. Fortunately, British Nylon Spinners wanted to go there. That is an important factor in the Stroud area. I am certain that diversification would be of great help to any area of heavy industry which depends on only one type of work.

I suggest that the Government's policy of making sure that our reserves are sufficient to sustain our foreign trade, and making sure that we do not suffer from inflation to such an extent that the prices of our exports rise so that we cannot continue to export, is in the long run the only policy which will bring benefit to the unemployed of this country. I hope that the Committee will approve this Supplementary Estimate.

6.13 p.m.

Mr. Leslie Hale (Oldham, West)

I speak today under some physical disability and I therefore intend to address the Committee more in the tempo of Handel's "Largo" than in that of the "Ride of the Valkyries". In any event, I take the view that our party controversies can be conducted on the hustings and that the question of unemployment is already too grave for it to become so much subject to party controversy or the sort of interchange and play of opinions which we have had from some limited points.

Although I have said that, the Committee will not be surprised if I am still constrained to agree that I shall find that dictum extremely difficult to follow in view of two speeches which we have just heard. The hon. Member for Barry (Mr. Gower) is always entertaining. He recalled to me that a great friend of mine once wrote a book which attracted attention in distant Moscow and was asked whether he would allow it to be published there on a royalty basis. He agree, it was published—and published successfully and sold extensively.

My friend wrote some time afterwards and asked, "How many roubles do I get for this?" They replied, "You have a very large number of roubles to your credit but we regret to inform you that it is the custom, under our credit arrangements, that roubles cannot be exported." He wrote back and asked, "What do I do?" They said, "A very simple solution would be for you to come and spend them here. Why not have a holiday over here, which you will thoroughly enjoy, and spend your roubles?" He said, "That will do me fine", and applied for a visa. And they refused the visa. That is the policy which the hon. Member for Barry commended to the Committee with great passion, power and eloquence and with balanced sincerity.

So far as it applies to Oldham, I would tell him that three years ago we applied for leave to build six schools, which were extremely urgently needed in a desperate educational situation. The Ministry refused leave to build any of the six. We had deputations, and so on, but it still refused. Next year, the Ministry again refused permission to build any of the six. It has now granted permission to build two. The hon. Member for Barry says, "This is part of our social services. We are passionately interested in education. We are allowing you to build these two schools, and that will have a resultant effect on unemployment. That is part of the benefits which you reap from a Tory Government." This applies almost to everything else.

Next, we had a speech from the hon. Member for Stroud (Mr. Kershaw). It was an excellent speech in its way, as it has always been for the last 120 years. It is the classic explanation from a Tory of why, if they are addicted to laissez-faire, there are some problems with which they cannot deal. No one has ever doubted that. The hon. Member asked, "How can we get foreigners to buy our goods?" One way, of course, is not to make them foreigners—and this is the kind of proposal which I, personally, have been advancing for a considerable time.

The hon. Member for Scarborough and Whitby (Sir A. Spearman) raised, in a sense, much the same point. He said that we have control over only a limited area. This is not a new fact which has suddenly arisen in the course of this Tory Government. The map of England, Scotland and Wales has remained precisely the same over the centuries except for a little coast erosion, which was not dealt with until my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) took charge. Subject to that, the problems are the same today.

We came along in 1946 or 1947—not for the first time, but as post-war pioneers—and talked about a united Europe, the planning of production and the creation of an economic market which could hold its own and would be big enough to look both America and the U.S.S.R. in the face. In fact, we were quite prepared to look America and the U.S.S.R. in the face. The difficulty then was looking Transport House in the face.

At any rate, these proposals were made and the Council of Europe came into existence. Hon. Members will find that at the Council of Europe we do not call the representatives who attend there foreigners; we call them allies. They are anxious to co-operate, and have long been anxious to co-operate, and it has been our neglect which has now faced us with the miserable situation of saying that either we have to opt into something about which we are not quite sure or else we have to run grave risks of opting out. Even now, instead of talking about planning an area we are talking about the difficulties of Morton's Fork, on either prong of which we might find ourselves economically the worse.

That is the position. What is the good of getting up in 1959, having voted solidly for a Tory Government for seven years, and saying, "I have only just found this out and I want to explain this situation to the House"? When I came back from Canada, in 1945–46, I talked about an economic consultative Parliament for the Commonwealth. Why not? We have done it for Western Europe. There is no Tory who on the election platform does not boom out about the Commonwealth and the Empire and the Union Jack—and I agree; until he has been there no one can understand the sentimental and social ties which bind us to these distant lands. But for years Tory Governments have forced them to industrialise by declining to give them a fair price for their raw material products.

Mr. Osborne

They wanted industrialisation.

Mr. Hale

That is not true. The number of subjects which the hon. Member for Louth (Mr. Osborne) fails to understand expands almost day by day. There is a sort of Gresham's Law about the hon. Member.

Mr. Osborne

The hon. Member knows full well that in India at present there is a steel mill being built by Russia, by America and by Britain at the urgent request of the Indian Government, who want to industrialise their country so as to be able to raise the living standards of their people. Surely we ought to encourage that.

Mr. Hale

I did not think that even the hon. Member for Louth was capable of misunderstanding me. I am referring specifically to Australia and Canada, with their great under-populated areas. I did not think that even he would imagine that I was referring to the huge population of India. Obviously, these are diametrically opposite problems. The hon. Member shows that he appreciates this. I will credit him with thinking that he knows it perfectly well. In any event, I was talking about a suggestion which I made in 1946, when India was not even an independent Government within the Commonwealth.

It is the problem of laissez-faire, which is amazingly put by Conservative Members today, who say, "We are always prepared to plan under-production, but never prepared to plan full production. We will help the cotton industry when it is facing ruin and give it compensation for the spindles we cannot use"—how many times have they done that?—"but we will do nothing to plan the production of cotton and to see that cotton has a sale"

This dichotomy of ideas which separates the two sides of the Committee is exemplified in the concept of a market, because the hon. Gentleman on the other side thinks that a market is a place where people are willing to buy.

Mr. Osborne

Yes.

Mr. Hale

The hon. Member should apply his mind to the debate for a few minutes and start thinking instead of continually speaking. He does not understand that need provides the market and that goods should be made for use and not for profit. That is a scandal. The hon. Member should listen quietly for a moment.

I lived in a village in Leicestershire where the miners were not allowed to dig coal for the mills of Oldham and the mills were not allowed to make shirts for the miners in Coalville who needed them. That was the old conception of Tory economy. Now we have mills all over Lancashire closing down, while people all over the world, particularly in the British Colonies, are short of shirts. Before we think of selling to the foreigner let us think of the Colonial Territories. If we are to develop them, let us not embark upon the sort of mad economy in which there is over-production of consumer needs and under-production of raw material needs. Right hon. and hon. Members on the other side of the Committee pay lip-service to that concept, but nothing ever happens in that connection.

I said that I would speak temperately. The situation in Oldham today is quite astonishing and is quite different from that in any other part of Lancashire. We could see what was coming, at any rate, for some months. An hon. Member who is constantly in his constituency and hears the warnings of redundancy is often very well informed. I was criticised some months ago for slightly over-painting the picture, but I only did so a week or two in advance. Oldham has three times as many unemployed today as any other town of the same size in Lancashire. On 8th December, it had 7,414 unemployed. That is an unemployment area which takes in a small part of Failsworth and part of Chadderton, but these are all difficult areas to define in terms of population. In the course of the weeks during which I have been in Oldham every statement I have heard convinces me that the situation will become worse. I have no desire whatever to exaggerate that situation, which is a very grave one.

Oldham has a wonderful industrial record. It has everything to offer to new industry, except very extensive areas of land. We have ample room on which we could develop new industry. We have a population second to none, a record in industry going back for 100 years—many of our present industries have been there for many years—and a progressive corporation with a first-class Development Area committee which has been working very sincerely and with an earnest desire to develop new industries. Indeed, we have started a few in these recent years. Unfortunately, though we welcome them very much, they are mostly industries which employ a predominance of unskilled or not highly skilled women labour. We have one of the finest provincial newspapers in England, an evening newspaper and a weekly newspaper. We have a genuine community life, with a complete and unified social life centred in the town. We have an excellent record in connection with strikes, disturbances and bad feeling between employers and men. We have some very good employers. That is the record.

On 8th December last, 7,414 people were unemployed in Oldham. Each one of them is a human tragedy. Each one of them is a man who will soon wonder whether the television set goes first. Each one of them has to face a new problem which has arisen quite suddenly in the last few months in an area in which successive Governments have guaranteed employment. Less than ten years ago we were employing foreign labour in Oldham to supplement the existing workers, and they were made welcome. That creates a new problem with which I need not deal today.

I want to be as fair as I can. Much of this unemployment is due directly to the policy of the Government. When my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) and I went to Oldham in the autumn we heard a great deal more about the credit squeeze than about Hong Kong as one of the things which affected them. It is not the effect of the credit squeeze on the mill. It is the effect of the credit squeeze on the customer. Every shop selling cotton goods was reducing its stocks under the impact of the credit squeeze. When the tap of that squeeze is turned off there is not the same impetus to raise the stocks to the old level.

The hon. Member for Stroud mentioned the vast sums which we are spending on the nationalised industries. They are largely replacements of the cuts which were made. The cuts hit certain sections of the textile industry very hard. Most people do not realise the amount of cotton which goes into making conveyor belts or tyres. Specialised firms were hit. One of the tragedies was that some of the best firms were hit first. We speak quite freely of re-equipment and capital development. When a tragedy comes as quick as that, it is very often the burden of capital investment, unpaid, which forces the mill to close. It is the extra burden of the instalments on the machinery.

A crisis such as this in the textile industry always affects spinning and doubling first, and this time it has made a tremendous impact on them. Adding together yarn agreements, reduction of investment, the credit squeeze, foreign competition, and so on, no one is able to say why the impact has come with such force on that section and with rather less force on the weaving section. Once that situation has developed, it begins to hit this tightly compact area with unusual force. The next most important industry in Oldham is the manufacture of textile machines, and there is no home market today for textile machines.

I beg right hon. and hon. Gentlemen opposite to think about these problems. If we are to have a cotton industry, we must have some measure of re-equipment. This industry had a very high export value in relation to its total product. Its total product was not enormous, but a high percentage of it was going to the export market. The maintenance of the home market is essential to the full maintenance of the export market. Unless there is a system, a plan and some ideas, matters will become worse. I suggest to the Government that something akin to what is done by the Board of Trade in the boot and shoe industry, having a system of leasing machines, would permit measures to be taken in times of adversity so that people were not pressed beyond the limit.

Opening new industries in our complex society is an extremely difficult process. Our society has become very complex. I myself sometimes have great difficulty in knowing whether to address a Question to the Board of Trade, to the Ministry of Supply, or to whomever it might be, and I am not always clear about the dual responsibilities of the various Ministries. Whoever comes to bring a new industry to Oldham has to deal with the Post Office, the gas board, the electricity authority, the Ministry of Supply, the Board of Trade, the Ministry of Labour, and others.

This is an urgent problem. I presume that the Board of Trade would be the Department concerned. Why can we not have a No. 1 urgency organisation to centralise information about all these things? It takes me a month to get a reply from the Ministry, and when I do receive it I write again and say that it is not quite what I wanted. There should be an emergency organisation which has in its files plans and information about every bit of available land in the area, which knows the rates, the amount of unemployment, the sort of skill available, and the needs of the community. Such an organisation should work with the local corporation or local planning authority and have all the data ready. All this information should be there.

But we need more. As I say, we live in a complex society. One hon. Gentleman opposite said, perfectly fairly, that, in view of the complexity of our society, the expansion in production will itself cause unemployment. This is the old Luddite problem. Up to a point, the Luddites were right. No one ought to say to the workers, and, in the end, no one will dare to say to the workers, that they can have no share in it.

It had better be said as soon as possible that, if there is to be a vast expansion in production as a result of what is generally called automation, as a result of all these new processes, new forms of power, new forms of work and so on, the benefit will be spread among the workers, not only that profits will be made out of it The workers will not permit the Government to create unemployment as a result of the increasing development of modern science. We are all heirs of the new age of science with its benefits and terrible fears. We who may be about to die are entitled also, if there is to be expansion, to share in life, to have life and have it more abundantly.

This transitional problem presents itself in quite definite and acute forms. I could take hon. Members to a highly equipped engineering industry in Oldham which is having the greatest difficulty in carrying on. I could take them to another which is prepared, given the additional capital, to double itself straight away. Neither of them is a very big industry. The fashion and pattern of industry, of course, changes and there should be the maximum possible information available about it.

Anyone knows that the man who bought a bus at the right time, on the hire-purchase system, in Coalville during the early days, and then acquired a second, became a great and prosperous industrial magnate. He happened to come in when buses were coming in. The man who bought at a different time might not. In the same way, there was in the light engineering industry, some years ago, tremendous prosperity among the smaller firms because there was work in connection with the aviation industry. Today, because of a dearth of orders from the Ministry of Supply, because of delays by the Ministry of Defence and because of arguments about aeroplanes, and so forth, the situation is very different. In the meantime, the small jig-making firms are almost closing down. This is an impossible situation.

In the area I represent, there are four firms working in electronics. There is the Ferranti Company, one of the pioneers of the computer. These developments in themselves may even alter our local government boundaries, because the smaller local authorities will be too small to be able to furnish themselves with the scientific aids needed in our new society. In these developments—a subject about which I am wholly incompetent to speak—there is a variety of processes, some secret and some not, but all highly recondite, many of which promise great opportunities for expansion.

It is the duty of the Ministry to be aware of trends, to be aware of possibilities, and to be prepared, if necessary with statutory powers, to give the necessary impulse to expansion in those firms which are maintaining full employment and developing a new form of power. Similar considerations, of course, apply to the development of atomic Rower, but I will not weary the Committee about that.

We have here a very great problem. Men working in textile engineering are told that they will shortly be redundant. It really is impossible to refrain from saying that there appears to be a complete unawareness on the part of the Ministry of the tragedy which is occurring. One great factory, one of the best for employment in Oldham, belongs to the Ministry of Supply. The Department relet it on a 21-year lease only a few months ago to a private firm which, it is publicly said, is likely to close very soon, and it has an option to break. I asked whether it had not been made a condition that maintenance of employment should be secured in the course of agreeing a long lease like that. I was told, "No, that is against the usual custom."

I do not know much about electronics, but I do know a bit about leases, and I was a member of the Leasehold Committee. I cannot understand why, in an ordinary lease, there should not be an ordinary clause to the effect that, "This is a factory, and you must not turn it into a fish and chip shop." Surely, the cost of the rent in these multiple firms is charged to tax, and the Government are not getting much out of it. At least, they should do something for the welfare of the community. These things go on all the time.

I do not want to deal with individual cases, but recently an order which Oldham had had for many years was moved to Blackburn on the ground that Blackburn needed it because there was some unemployment there. This did not occur in my division and I did not know about it until afterwards. Oldham has three-and-a-half times as much unemployment as Blackburn. Somebody ought to have looked at that before people were just turned out of work.

I recently put down a Question about the possibility of Oldham and the surrounding area becoming an assistance area within the meaning of the Government's Measure. The latest figures are so impressive that I cannot doubt but that we shall be able to come to some agreement with the President of the Board of Trade on those lines. It seems to me that the area might well include some part of Royton, which is adjacent to Oldham, and the urban district of Chadderton and the parish of Lees. I am not sure about Crompton. I think that some such area should be included.

It shows a lack of understanding of the whole problem to talk about Manchester as a place which can receive Oldham's unemployment. Geographically, we are not many miles from Manchester, but Manchester itself has a large commercial area and has 9,000 unemployed of its own. That is not a large figure for a place of its size, but there are still those 9,000 people who will want work before an Oldham man can get in. In any case, he would have 40 minutes' travel from the centre of Oldham, by bus, twice a day, to do it. The problem cannot be solved in that way. I beg the right hon. Gentleman to do something positive about it.

The state of the cotton industry is not something which I wish to labour in any way. Neither party can be permitted to say that this great industry has run down to a point where it must stay. There were 750,000 in the industry in 1913. There are 200,000 employed in it today. The loss of skill and of exports is a major disaster for the country and a still more serious disaster to Lancashire. Oldham, perhaps, feel the impact of it more than any other town in England. The situation is grave.

I think that I can suggest a solution of the problem. It can be found, as I found it, in crossing from Kenya to Uganda and seeing how much of the extra prosperity of the young people of Uganda is spent on cotton cloth. In a primitive community what the African lad wants is a bicycle and what the African lass wants is a cotton dress. There is a market in this great area, with its vast population. I know that it can be said with truth that one of the first things which these places will do is to erect textile mills of their own and that they can grow and spin the stuff. But one is talking now in terms of an area which is so vast, with an ever-increasing standing of living, that a good deal of trade and custom would still come to this country. Some of the men in Oldham would willingly go out and help with the work.

In the face of the magnitude of this tragedy in Oldham which impinges on every one of our activities—every club, every retail shopkeeper and every person in the town begins to share the growing burden of the poverty which is gradually increasing—we have not the right to stand aside and talk in cliches. What Oldham asks for is action, and action today. We ask the President of the Board of Trade, or the Minister of Pensions and National Insurance—I am not being discourteous to the right hon. Gentleman; I was merely accepting the fact that it is out of the ambit of his ordinary Ministerial activity—or whoever is to wind up the debate, to say that the Government are determined to give every assistance in rebuilding our industries and in re-creating full employment. If the Government do not do this, their fate will be determined at the hustings, and it will be fairly and justly determined.

6.42 p.m.

Mr. Cyril Osborne (Louth)

I am delighted to have the opportunity to follow the hon. Member for Oldham, West (Mr. Hale) because, by a strange coincidence, I have been going regularly to Oldham ever since 1926. I shall be there this weekend, and one of the reasons for my going is to try to learn something about the difficulties of the cotton industry. Because of my thirty years' intimate knowledge of Oldham, I agree and sympathise with a great deal of what the hon. Member says. Oldham has a fine and industrious people who have done a fine job, but Oldham itself typifies the problem of our whole nation.

The hon. Member said that the problem was too grave for narrow party controversy. That is true. This is the one issue at home which really matters, no matter which party is in power, but because I believe that the next General Election will be decided on this one issue internally I feel that it is our duty on both sides to discuss the matter as dispassionately as we can and to put the facts before the people so that they may judge fairly and with a full mind.

I thought that the hon. Gentleman rather spoilt his speech by making a narrow party point. He said that the Government were asked to build six schools, but refused to do so. Now they are to build two. The problem of Oldham cannot be solved by building schools. The hon. Member said that employment in Oldham—and I have been round the engineering factories many times—depends upon their being able to sell their textile machines abroad, and he asked with great pathos, "Who will buy these textile machines?" That is the problem which faces the whole nation. Who will buy what we are producing? We must tell the people, and be honest about it, that it is useless to produce goods which we cannot sell. To do so will bring ruin to the whole nation and lower our standards in a way that will alarm us.

The hon. Member went on to say that a united Europe was probably one cure. I think that that is true, but we cannot plan, even if we had the power, an economic Zollverein for a united Europe unless we have political unity, and at present we are miles away from that. President de Gaulle would not let us dictate to him what should happen to French industry.

The hon. Member made another point. He said with deep feeling and great sincerity that what he had seen in Uganda typified a cure for Oldham's problem and the problem of places like Oldham. It is a shame on the white man that the coloured man has such a low standard of living, and our only hope is somehow to raise their standard of living nearer to ours. As a businessman who sold goods to Africa, what did I learn? I used to export to Africa. What happened? Immediately the Japanese produced cheaper goods the Africans did not buy my Leicestershire-made goods; they bought Japanese goods. One of my companies lost big orders in Africa some years ago because the Japanese came in and undersold us in such a way that we could not compete with them. This is the problem which faces the whole of our economy. In a free world, one cannot compel the people of Uganda to buy our textiles and cycles if they can get cheaper ones elsewhere.

One hon. Member said that the unemployment figures do not give a full picture of the tragedy that faces us. That is true. The Committee ought to bear in mind that during the last twelve months or so most industries have gone through a difficult time, and we have learned when on short time that we can, through altering our organization, produce as much or perhaps more with less labour than we did before. Because of that, too, and because there is no shortage of labour, as there was before, we are no longer hugging the labour to ourselves and keeping it whether we can use it or not.

I warn both sides of the Committee that in the coming months, through an increase in industrial efficiency resulting from the difficult times through which we are passing, there may well be an increase in national productivity without a comparable rise in employment. We must, therefore, face the situation.

The hon. Lady the Member for Lanarkshire, North (Miss Herbison) repeated what has been said so many times by hon. Members opposite. I wish they would not say it, because it is so untrue. She said that the Tory Government have planned unemployment—that we wished unemployment. The Committee always likes to listen to personal experiences. Among many things in which I am interested is the manufacture of textiles. What on earth is the good of making goods that people cannot afford to buy? I want people to be fully employed, with plenty of money and high wages so that they can buy the things which I produce. What is the good to me of unemployment and low wages? I want prosperity if only for the selfish and narrow reason of being able to sell what I produce. I also have interests in the import and distribution of food.

It is no good to me and my fellow businessmen—I talk now as a businessman rather than as a politician—to have people unemployed who cannot buy the things I am importing. Therefore, to say that we as Tory businessmen want unemployment is arrant nonsense and I hope that hon. Members opposite will not say it again.

The hon. Lady said that we were deliberately creating unemployment. We are jolly bad businessmen if we do that. [HON. MEMBERS: "You are".] If hon. Members say that I am a poor businessman, there are few opposite who can equal my record.

Mr. Goronwy Roberts (Caernarvon) rose—

Mr. Osborne

I wish to make my speech—

Mr. Roberts

It was not in any way directed to the hon. Member.

The Temporary Chairman (Mr. W. R. Williams)

If the hon. Member for Louth (Mr. Osborne) does not give way, the hon. Member for Caernarvon (Mr. G. Roberts) must resume his seat.

Mr. G. Roberts

On a point of order. The hon. Member expressly looked at me when he made that observation. I wish to explain that the amusement I showed was certainly not directed at the hon. Member, because I know nothing about him. I was merely amused by what he said.

The Temporary Chairman

That is not a point of order.

Mr. Osborne

The hon. Member should not flatter himself. I did not even know he was here.

The hon. Member for Newton (Mr. Lee), who opened the debate, said that fear of unemployment had now returned. That is tragically true, even if only three out of every 100 are unemployed; but of the 97 who are still in employment, many are beginning to wonder whether and when it will be their turn. This is the greatest factor at home. We as Conservatives are fools if we run away from this challenge. We have got to meet it. It ought to be met and not evaded, and I want to face it Hon. Members opposite often say that we on this side do not understand unemployment. In my first job, when I was 14, I worked from 6 o'clock in the morning until 6 o'clock at night for 5s. a week and I know what unemployment is. Hon. Members opposite cannot say of me that I do not know what I am talking about. As I said at the Tory Party Conference at Blackpool in 1946, only those who have been unemployed know what it means to be out of work. Next to war, unemployment is the greatest scourge facing modern mankind. It is, therefore, an issue that must be faced squarely.

The hon. Member for Newton blamed the Government, and the burden of the speeches from hon. Members opposite has been that it is the Government's fault that we have unemployment. Our position is simply this. Last week, I asked the Economic Secretary to the Treasury how much of our total manufacturing production had to be exported to pay for our imports of raw materials and foodstuffs. My hon. Friend gave the startling figure of 30 per cent. Let me remind hon. Members opposite that we grow enough food for only 30 million people and that there are 50 million of us. We have no raw materials at all except coal, and all our raw materials and 40 per cent. of our foodstuffs must be paid for by what we export.

The problem facing us is how we can get people overseas to supply us with the foodstuffs and raw materials in order to buy our goods if they are offered goods that are slightly better in quality and/or slightly cheaper in price. I see the hon. Member for Ashton-under-Lyne (Mr. Rhodes) smiling at the point I am making. I remember his last speech, when he came back from Hong Kong. He talked about a good cotton shirt which he had bought out there for 5s. It had come from China.

Those are the main things we want to talk about. I wish we could forget the General Election—

Mr. Robens

I bet the hon. Member does.

Mr. Osborne

We shall win. I am not frightened of General Election.

Mr. Robens

Whistling in the dark.

Mr. Osborne

The right hon. Gentleman should have read yesterday's editorial in The Times, which was specially written for him in his present mood. It was entitled "Froth".

The problem is how we are to sell the 30 per cent. of our industrial production to pay for the raw materials and foodstuffs that we must have. It is made doubly difficult, first by the fact that as, with our help and with American good will and help, the under-developed countries are being industrialised, because their labour costs are anything from one-fifth to one-tenth of ours they are, other things being equal, able to undercut us. It is monstrous for hon. Members opposite to say in their party programme that they will give 1 per cent. of the national income to help the undeveloped nations and then to try to prevent the people of those countries from earning a living by selling what they produce.

How are we to live against them? Let me give three examples. Take coal. I have great sympathy for the coal miners, who, because of the change, are finding themselves threatened with widespread unemployment. The whole world, however, is finding that oil is more convenient and, in some cases, cheaper and we cannot prevent the world from using oil instead of our coal. Our old markets in the Baltic and the Mediterranean have gone and for ever. No Government here can make the foreigner do what the National Union of Mineworkers has just done: that is, to tear out oil-burning equipment in its new offices and to install coal-burning equipment. We cannot make the foreigner do that in order to buy British coal. That is typical of the problem that we are facing.

The other night, with some hon. Members opposite, I was in the Parliamentary and Scientific Committee, where we were talked to in a most learned way about the coming of nuclear power. That may take 10 or 15 years, but when it comes, if it is cheaper and more easily handled, it will put more men out of work in the coal mines. Not even the party opposite can stop it.

I remind hon. Members opposite that certain of the coal mines in South Wales were producing coal at an average loss of £4 per ton. The nation could not keep all its old-fashioned industries going at that loss without reducing our standard of living to such a catastrophic level that we should all be shocked.

Mr. Tom Brown (Ince)

Will the hon. Member add that the miners in South Wales were not responsible for the loss of £4 a ton? It was due to the fact that the mines were ancient and their maintenance costs exceedingly high, thereby absorbing a tremendous amount of money simply because the mines were ancient and worked out. It was not the fault of the miners.

Mr. Osborne

I never said that it was the miners' fault. The hon. Member has helped to make my case. In many respects, this country is old and worn out. No party can alter that. I did not blame the miners. It is due to the geological facts of our situation and the fact that we have 20 million too many mouths to fill.

Then there is the question of shipbuilding and ship repairing, which has been raised so many times by hon. Members on both sides who represent Sunderland. Those industries face serious unemployment, and they will face a great deal more. It is something which we cannot control politically. It is because Germany and Japan can repair and produce ships at about 70 per cent. of our cost, and the men overseas who are buying them say, "We want the cheaper article and the better article."

Mr. Popplewell

I am sure that the hon. Member does not want to mislead the Committee. Is he correct in saying that Japan and Germany are undercutting us in the price of shipbuilding? It is not on the price but on ability to give earlier delivery that the Germans and the Japanese have come into competition with us.

Mr. Osborne

It is true that at one time earlier delivery dates played a great part.

Mr. Popplewell

They still do.

Mr. Osborne

The advice I have from people who should know what they are talking about is that on a rough average the Germans and the Japanese are doing the work at 70 per cent. of our charges.

Mr. Popplewell

No.

Mr. Osborne

Up on the Clyde there is likely to be a new strike between unions on who shall do this, that and the other job. This is the folly which we must bring home to our people. In shipbuilding we have dropped to third place in the world to Japan and Germany for the first time in our modern history.

The hon. Member for Oldham, West spoke feelingly about the position in the cotton industry. I understand that it is not so much competition from Hong Kong, Pakistan and the Indian mills that we fear. It is the competition from Red China that is already bedevilling the position in the Far East. I am told by people in the trade that Chinese agents are saying in the Far East, "Whatever price rules in Bombay we will take 10 per cent. less." The Chinese, in order to get sterling of which they are very short at present, are prepared to sell at almost any price. How could a Socialist Government deal with that? How could that situation be dealt with so as to save the people of Oldham?

In today's Times there is a picture of the first electric locomotive produced in China. I agree that it is only the first, but it is indicative of what is being done in China at present and what will be done there within a decade. Not only will our textiles feel that competition but so will our engineering industries. This is the problem facing us, and I do not see how any Government, by party politics, can possibly overcome it.

Mr. Hale

I am not saying that this was the fault of the Tories. It started under a President of the Board of Trade who has now become a life Peer in another place. The policy, I understand, was the policy of Mr. Foster Dulles. China was very anxious for an expanding world trading policy. She had no great impetus to manufacture textile machinery for export, but she is exporting now to Indonesia. China's great need was the extension of the Yangtse River, a 60-year or 75-year programme in which she wanted our help. But for political reasons, under the dictates of Washington, we put an embargo upon Chinese trade which compelled the Chinese to make these things themselves. We had a similar system of embargo applied between the wars to Ireland which led her to build industries to make consumer goods that we hitherto supplied.

Mr. Osborne

I believe that it is true that the Americans were wrong in refusing to trade with Red China. It has been a tragedy for us, but the Americans have not felt it. Whereas we have to export 30 per cent. of our goods, the Americans have to export only 3 per cent. Therefore, the same common policy hurts us ten times harder proportionately than it hurts the Americans.

The Times gave prominence a few days ago to the position in India—and India will be an important factor in deciding whether the modern world goes all Communist or not. India could save from Communism that one-third of the world which is not committed to the West. The Times pointed out that three great steel mills are being erected in India, one by the British, one by the Americans and one by the Russians. The Russians are working "like steam." There is no letup, no amusements, no alcohol, no nothing—just work and work. They are determined to make their mill produce first, produce the most and produce the cheapest. But when these three mills are working, the present supply of steel from this country to India will largely cease, and that will cause unemployment in our steel industry. No political action can stop it.

This is where I regret that hon. and right hon. Members opposite who know these facts still go on with the old story, for political purposes, that it is the Government's fault. Is the situation in Lancashire the Government's fault? The right hon. Member for Huyton (Mr. H. Wilson) spoke in this Chamber on 13th March, 1952, on the Budget proposals and dealt with the question whether Lancashire's ills could be cured by political methods. He differed entirely from his colleagues, because then he was dealing with the facts of life and not hoping to get votes at a coming election.

This is what the right hon. Gentleman said: At present we are facing a long-term crisis in our export trade. I think that that is what the Chancellor really meant when he referred to the 50-year development of the crisis. Many countries have developed their own industries now, and the leadership we had in the 19th century has disappeared. In many countries they have their own consumer goods industries, and we cannot export our textiles to them. We hear that even Pakistan, the hopeful new post-war market, will be self-sufficient in textiles by 1956. At any rate, that is the policy Pakistan proposes. It was an under-statement. Pakistan is exporting now and is competitive with us.

The right hon. Member for Huyton added, and I commend this to hon. and right hon. Members opposite: We have to direct ourselves now to a very different pattern in world exports. We can no longer look to exporting consumer goods on the scale that we have been doing in the past. When an export market reaches a certain stage of development it will provide its own consumer goods industries, and it will look to us for machinery with which to develop them. When a country starts like that, it will take piece-goods from us. Then it will make its own and we must be prepared to supply textile machinery. Then that country will start to make its own textile machinery."— this is what we face— and we must adapt ourselves and export, perhaps, steel or machinery for making steel. We must keep up with the markets and with the changes in the markets in all these countries. We have to recognise that as these different countries develop, and at a different pace, we have to swing about our exports from one country to another and from one trade to another."—[OFFICIAL REPORT, 13th March, 1952; Vol. 497, c. 1626–7.] The tragedy of unemployment will not be solved by either side of the Committee blaming the other. It will be solved if we can put before everyone in the country, employer and employee alike, the immensely difficult problem which we face, and get from both sides that bit extra for the good of their country, for the survival of their country. This will enable us, in an increasingly competitive market, to sell the goods we must export so that we can live and be employed.

7.11 p.m.

Mr. Ernest Popplewell (Newcastle-upon-Tyne, West)

The hon. Member for Louth (Mr. Osborne), like many more on his side of the Committee, refuses to face the facts about employment. Hon. Gentlemen opposite are content to follow the line that the Government have no responsibility in this matter and that they regret any development of unemployment. They are rather kind-hearted individually, but collectively they are devils, to say the least. By their lack of planning they allow laissez-faire methods to develop and they reject any controls, any priorities. They allow the money market and the criterion of profitability to decide what shall be produced. When there is a run on certain consumer commodities at home and we neglect our export market, which is so necessary if we are to survive, they come along, as did the hon. Member for Louth, and say, "This is not really due to Tory policy."

The hon. Gentleman forgets what took place at the last election. He forgets the Three Wise Men of the Cohen Committee, set up by the party opposite. He forgets the Geddes Axe of the 'twenties. He forgets the May Committee of the 'thirties. All those committees were appointed to protect the Tory Government in following a certain line of policy calculated to keep profits at a reasonably high level irrespective of the human problems involved.

Today we are having a sombre debate. It is history repeating itself. We can look through the pages of past HANSARDS and cast our minds back to pre-war years and remember many similar debates that took place in the years between the wars. We have been much perturbed, particularly in these last twelve months, because we have seen history repeating itself. We see a growing army of unemployed. This is the fifth occasion within a year that we have attempted to influence the Government to deal with the problem of unemployment instead of sitting on the fence and allowing it to develop.

We have had today the alarming statement from the Minister of Labour that there are now 620,000 unemployed. The right hon. Gentleman forecast some few months ago that this figure would be reached. Now it has been reached, what are the Government doing to prevent it from rising? They are simply hoping that this is a seasonal increase which later may be reversed slightly. Events abroad, however, belie this hope. In America unemployment has increased this month by 700,000, and this fact deals a rather shattering blow to right hon. and hon. Gentlemen opposite, because a little while ago they pinned their hope to the belief that the American recession had ended and that increasing productivity in the United States would increase world trade. The present figures show, however, that instead the trend towards a recession continues.

The figure of 620,000 unemployed here is not the whole of the story by a long way. The latest figures available indicate that in addition to the 620,000 actually unemployed there are 244,000 fewer people in employment. This means that the working population has fallen by 244,000 according to the figures published last November. I venture to suggest that when the latest figures are issued we shall find an increase in that number. Therefore, instead of the figure of unemployed being in the region of 620,000, the real figure is well over 900,000 and this is serious.

In speaking tonight, I want to make certain constituency and North-Eastern area points. We in the North-East pride ourselves on our craftsmanship. With all due deference to our friends elsewhere, we say we can compete in craftsmanship with anyone in the world. What is the position today? According to the latest published figures we have in the region of 40,000 people unemployed. As my hon. Friend the Member for Newton (Mr. Lee) said, this means that there are five unemployed for every job advertised as vacant at the employment exchanges or in some other way.

The alarming thing is not merely those figures of unemployment in the North-East but the considerable under-employment that is taking place in various factories. Many are not working to capacity. Many are having to adopt short-time working. I have here a statement given to me by responsible people engaged in heavy engineering in the North-East. I will not quote the names of the firms involved, although I have them. In one firm 50 workers were paid off in the ten days prior to 21st January, in another firm 20 workers were paid off, in another 28 were declared redundant and night work has been terminated. In another firm 15 fitters have been paid off, in another 17 fitters, in another 20 fitters. In a shipyard 15 fitters have been declared redundant. So I could go on with chapter and verse of heavy engineering projects in the North-East which are suffering material reductions of staff.

We in the North-East know so well what this means. There was the unfortunate period in pre-war years when the majority of my constituents were unemployed because of the shortfall in the heavy engineering industry. By the Development of Industry Acts we were successful in attracting a large number of light engineering and other factories to the area until we reached the stage when we had practically as many people engaged in light engineering or similar factory work as there were engaged in heavy engineering.

There is now a shortfall in production in many of those areas. Large numbers have already left the furnishing trades where short-time working began much earlier last year—in January instead of April, as is normal—and the seasonal spans of short-time working have been very much longer. It has been embarrassing to see the number of craftsmen who have had to leave that work.

I shall be interested to see how the figures to be published on Thursday compare with those published on 8th December. I dread those figures, because I know the area so well. I attended a conference convened by the trade unionists in the area only a few Sundays ago because they were afraid that we were heading back to the conditions of before the war.

A shocking story has to be told of the building trade. Between 1955 and 1958, there was a decrease of nearly 5,000 employees in that trade. Vacancies notified were reduced by 50 per cent. At least 500 bricklayers and masons have left the trade and there are 33 per cent. fewer apprentices. That is a shocking state of affairs, because it represents a major loss of new houses, new factories, new schools, new hospitals and so on. Brick production in the North-East in 1955 averaged about 33 million tons of bricks a month. By the end of 1958 it was down to 25 million tons, a shortfall of 8 million tons. Today, there are at least 6½ million tons of unsold stocks of bricks on hand. That is a tragic story and similar in content if not in degree to what we were told by my hon. Friend the Member for Lanarkshire, North (Miss Herbison) and my hon. Friend the Member for Newton. Wherever we turn, we find this gloomy picture. Hon. Members opposite say that we take far too gloomy a view of the situation. We are entitled to that gloomy view, for that gloom represents the facts of industrial life today.

Forty-six local authorities in the North-East have been asked if they can help with continuity of employment. I regret that only 17 have replied saying that they propose to continue to maintain the same rate of house building, chiefly to deal with slum clearance. The other 29 have clearly indicated that they have considerably cut their housing programmes because of Government policy. One authority has gone so far as to cease building altogether, saying that costs are far too high.

These are serious matters, and this is our only opportunity of raising them. The Supplementary Estimates for the Ministry of Labour deal only with matters such as salaries, incidental expenses, industrial disputes, training, rehabilitation, grants to local authorities, and so on. The scope of that Vote is not wide enough to allow these points to be made.

We are very suspicious about the Government's policy for Development Areas, a policy which is not worth the breath being wasted on it. North, south, east and west the call is for the Government to introduce new industries into areas of heavy unemployment. That is a cry in the wilderness, and the Government know it. Under the legislation of last year, only 16 new ventures have been sanctioned and they will employ fewer than 2,000 people.

Is that surprising? Government policy has been deliberately to bring about a fall in production. The iron and steel industry is working at only 75 per cent. of capacity. Because of that, the National Coal Board has had to close pits. Because of that we are not winning our way in world markets, nor taking our share in their expansion. World markets have not been static in recent years and the increased share of the Italians, Germans and Japanese has been at our expense

That has been because Government policy has been concentrated on the soft consumer market at home. They have shirked the order of priorities which has been necessary for the economy to permit full employment. As a result, we have not got our fair share of the expansion of world markets.

Sir A. Spearman

Will the hon. Member explain how the Government have shirked it? Does he not remember that investment is running at 65 per cent. more than it was in the last year of the Socialist Government?

Mr. Popplewell

Because the Government have utilised only the cumbersome machinery of financial policy and juggling about with a Bank Rate, which affects everyone, instead of introducing priorities and fiscal controls and guiding industrial production into those channels necessary for the national well-being. They have neglected all that and have dismissed such things as mere controls.

Let us have these controls if they will give us full employment and a decent standard of living. We have heard the arguments about inflation and the necessity to introduce a high Bank Rate in order to cut production and reduce inflationary tendencies, but at the same time we have seen profits going up by leaps and bounds. We have seen "takeover" bids going on and huge sums creating a tremendously inflationary situation. Then, it is the ordinary work-people who are asked to pay for this type of thing.

To return to my theme, we hear arguments against the Government exercising controls and planning in order to give us the goods that are necessary. To take the case of machine tools, heaven knows what difficulties we were in during the war years because we had not planned our machine tool industry. We all know that when we wanted to expand our economy at the end of the war we had to go to America in order to import machine tools which we should have been capable of producing ourselves but had not made our plans accordingly.

The machine tool industry is a vital sector of our economy, but we find that its orders have gone down from £98 million in 1956 to £58 million in October, 1958. This is the type of thing that is taking place, and it is the Government, and only the Government, who can keep an overall control on what is necessary in the nation's interest. It is the failure of the Government to do this which has brought us to this shocking position which causes us so very much alarm.

During the last election, the party opposite told us on the hoardings that it would maintain a high level of employment, and this is the high level of employment that they have maintained. They admitted that they could do it, or at least, inferred that they could, but they made a good many other promises which they quickly discarded as soon as they came into office. This is the high level of employment which the Government said they would maintain—620,000, plus 244,000, fewer in the working population. If we bring these figures into relativity, we shall see that our figures are getting perilously near to the 900,000 or one million mark.

This is a serious thing, and I suggest that, if the Government really want to do this nation a good service, they should get out as quickly as possible, let us have the General Election, and let the people decide whether they want this topsy-turvy type of policy or to go back to the days of full employment.

7.33 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. John Rodgers)

Although this debate takes place on a Supplementary Estimate of the Ministry of Pensions and National Insurance, the Committee has shown that it wished to debate the wider problem of the measures which the Government were taking for dealing with unemployment. Therefore, I think that it might be for the convenience of the Committee if I now intervene.

Before dealing with one or two matters, such as the Government's policy on rents, which I will tackle in the course of my remarks, may I say that I should be grateful if the hon. Member for Newton (Mr. Lee) could furnish me with particulars of the firm at Haydock which, he alleges, has been frustrated in its desire to expand. If he will send me the details, I can assure him that I will look into it immediately.

This is not the proper time to make a speech on the general theory of the trade cycle, or on the effects of the decline in international trade on our internal economy. Indeed, contrary to what was said during the course of this debate, and, I think, by the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell), our share of world trade in recent months has risen, though admittedly after a period in which it had been falling. This, I believe, is in part due to the energetic measures which the Government have taken to deal with the problem of inflation.

A debate on production is not properly balanced if it leaves out the problem of markets and the problem of exports. However, to deal with this adequately would be more suitable, I am sure, to the general economic debates which assuredly lie ahead of us in the next month or two. Nevertheless, I should like briefly to describe the two-pronged attack which the Government are making in tackling this problem of local unemployment, which is my own responsibility.

First, there are the general measures which the Government are taking to stimulate the economy, and I will briefly list them. Hon. Members all know them. they include the reduction of the Bank Rate by stages between March and November last from 7 to 4 per cent., the ending of the credit squeeze, the raising of the initial allowance by 50 per cent., the abolition of restrictions on hire purchase, the raising of the ceiling on public investment expenditure, and the ending of restrictions on borrowing by individuals or companies resident in the United Kingdom.

These are all matters of economic policy which concern the Government as a whole, and I believe that the steps which the Government have taken will expand the economy, will create more employment, and, at the same time, prevent a new bout of inflation or a weakness of the £, which are, of course, the real and great enemies of a policy of full employment.

Turning to the areas where unemployment is a serious problem, we are tackling this both by trying to attract industry to the places where the unemployed are, and also by providing inducements for workers to transfer to places where there are jobs. These are two complementary processes going on at the same time, and I should like to deal now with the first of these—taking the work to the workers. This has been a consistent part of Government policy since the end of the war.

The comparative prosperity which some parts of the old Development Areas now enjoy is proof of its effectiveness, for some of the old Development Areas are now relatively prosperous. The Distribution of Industry Act of last year is designed to extend the policy which we have been following, and that Act empowers the Treasury to give financial assistance in any place where there is high and persistent unemployment. Loans and grants can now be made outside as well as inside Development Areas, and to businesses as well as to industry proper.

Mr. Goronwy Roberts (Caernarvon)

Could the hon. Gentleman give us any details of the efficacy of that so far? I went through the statements which were made in both Houses six or eight months ago, but could he give us any details of what the effect has been on unemployment?

Mr. Rodgers

Obviously, in the course of my speech I will refer to that.

I would be the first to admit that up to now industry has not made full use of the powers under this Act. In the visits which I have paid to the D.A.T.A.C. areas, as it is convenient to call them, I have been struck by the lack of knowledge that exists, even among leading citizens, of the facilities that are available to them. It was to combat this that I sent out last month, to the heads of 50,000 firms, a leaflet describing what the D.A.T.A.C. facilities mean. A further 50,000 I have sent out through other channels to bodies such as chartered accountants, banks and organisations of one sort or another.

It is not without significance that the Board of Trade and the Treasury have had more inquiries in the last three weeks since that letter was sent than in the whole of the previous six months since the Act came into operation. It is too early to say how many of these inquiries will actually crystallise into firm applications, but at least the opportunities are becoming increasingly widely known and I can only hope, therefore, that the figures which I announced at a Press Conference three or four weeks ago will be improved over the next few months.

I wish to stress upon right hon. and hon. Gentlemen on both side of the Committee that this is not all that is being done by the Government. Our other main instrument for steering industry to the places which need it is the granting of industrial development certificates which firms must obtain before they can build a factory or an extension of more than 5,000 square feet. By refusing the certificates in congested areas, and granting them where labour is available, we are doing our best to steer industry to the places where unemployment is high.

The Committee may like to know that in 1958 we issued for the Development Areas 277 I.D.Cs. covering 8½ million square feet of factory space. The new employment which will result is estimated by the firms concerned at over 13,000 jobs. That number includes 4,000 in South Wales, 3,800 in the North-East, 3,200 in Scotland and 1,700 in Lancashire and on Merseyside. These figures take no account of the indirect employment, in shops, offices, and so on, that always follows in the wake of any industrial expansion.

The hon. Lady the Member for Lanarkshire, North (Miss Herbison) mentioned that I.D.Cs. have been granted in large numbers in the Greater London area. A great part of these are for industries catering for the local market which is enormous in this area; for such purposes as bakeries, laundries and the like. Much of the rest which are not catering for local needs are for extensions which, if refused to these firms, would not be built anywhere. Whenever we think there is a project for expansion or development which could be hived off and encouraged to go to another place, we do our utmost through the regional controllers of the Board of Trade, and at headquarters, to bring about this policy. We are getting—

Mr. William Hamilton (Fife, West)

Will the hon. Gentleman state what principle was applied when British Nylon Spinners were allowed to go to Gloucester? He suggested the answer at Question Time this afternoon and I am wondering whether he would elaborate it still further?

Mr. Rodgers

I will not mince my words. I was disappointed that B.N.S. did not go to one of the Development Areas. It went to Gloucester for these reasons. First, there was a Ministry of Supply factory available there and ready. B.N.S. was able to move in right away and it was estimated that it would be possible to get into production—and, therefore, provide jobs—from six to twelve months earlier than would have been the case had it been necessary to build a factory in another Development Area. That was of considerable importance because of the known run-down in the aircraft industry which is beginning in that area and accelerating, and also because of the closing of the pits in the Forest of Dean.

Mr. Hamilton

What is the percentage of unemployment in Gloucester?

Mr. Rodgers

I do not think that I should spend time in dealing with such a specific point, but I shall be happy to provide the hon. Gentleman with that information privately.

Dr. Dickson Mabon

Will the Minister allow me to intervene?

Mr. Rodgers

I would rather get on with my speech.

In addition, the Board of Trade has been making use of its powers under the 1945 Distribution of Industry Act to extend existing factories in the Development Areas and to build new factories. In the last two months 63 extensions have been authorised to Government factories in the Development Areas. These will cost just over £2 million and will provide over 750,000 square feet of factory space. Work has already begun on these. The geographical distribution of these extensions and the estimated number of jobs which they will provide is as follows: in the North-East Development Area, 28 extensions to provide jobs for 2,580 people; in the North-West, two extensions for 160 people; in Wales, 24 extensions for 1,090 people; in Scotland, nine extensions for 680 people. This makes a total of 63 extensions and 4,510 people.

Mr. Hale

This is very important. I understand that the hon. Gentleman says that the provision of I.D.Cs. in 1958 has provided work for 13.000 people, which is about 5,000 or 6.000 more in Development Areas. In the 1948 Act they provided for a total of fewer than 20,000 against an increase in unemployment of at least 350,000 over the same period. This is tinkering with the whole thing.

Mr. Rodgers

If we are proposing to become statistical. I must correct the hon. Gentleman. The D.A.T.A.C. areas affect only 10 per cent. of the insured population. The figures of I.D.C.s I have given refer to the Development Areas, and to Government factories there. The D.A.T.A.C. figures which the hon. Gentleman failed to include and a great many other measures—

Mr. Hale

This is what has been done to cure the problem.

Mr. Rodgers

What the hon. Gentleman and many hon. Members opposite fail to understand is that we have no power to compel firms to go anywhere—

Mr. Hale

Then why not take them?

Mr. Rodgers

—any more than we have the power to compel labour to go anywhere. I think that the use of such powers would be repugnant in times of peace.

Miss Herbison

Do I understand the Minister to say that the number of extensions for Scotland would provide jobs for just over 600 people, when the unemployment figure we were given today was 115,000?

Mr. Rodgers

This is one part of what we are doing. Perhaps I should have collected all these figures together. These were the jobs to be provided by present factory extensions.

The hon. Lady the Member for Lanarkshire, North asked me to consider making representations to my right hon. Friend about the building of speculative factories, particularly in her own constituency. I must remind the hon. Lady that already we have 28 factories—I admit that that is out of a total of 1,000—which are empty and that we cannot dispose of them. There are 11 of these factories in Scotland, so we do not feel that it would be a right policy to build speculative factories. However, in certain areas we are prepared to build factories at Government expense for firms who are willing to set up business in those areas.

The three main new factories which are now being built are Pressed Steel, at Swansea, which will provide 2,000 jobs at the start and ultimately 4,000 jobs; Crawley Industrial Products, at Llanelly, which will provide 250 jobs soon after it is in production, with a possibility of further expansion in the future, and Astral Equipment, at Dundee, which is estimated to give about 1,200 to 1,500 new jobs.

Finally, there is Colville's project, at Ravenscraig and Gartcosh, which will increase the output of Scottish sheet and light plate by about 500,000 tons when it is completed in four or five years time. These should provide jobs directly for 3,500 men, and we hope also to attract other industries which, in turn, will add to the employment in North Lanarkshire, where we realise that there are more than 11,000 people out of work.

We are confident that our policy of encouraging industry to go where there is greatest need will, in time, bring the renewed prosperity which is needed by these parts of the country. I have, however, three specific announcements to make on points which have been raised during the debate. First, there is the question of the rentals of Board of Trade factories in the Development Areas, a point touched upon by the hon. Members for Newton and for Leith (Mr. Hoy).

As I explained to a deputation which I received the other day, our policy is to let factories in Development Areas at current market value rentals which are assessed by the district valuer. I see no reason to depart in general from this policy, which accords with a recommendation of the Select Committee on Estimates which has been accepted by the Board of Trade. There are, however, two classes of case which gives rise to difficulties, and we are prepared to allow temporary abatements of the current market value rents to meet these difficulties.

First, on leases expiring before 31st January next, which will be renewed at new—and generally much higher—rents, at current market values that is, the rent increases to sitting tenants will be spread over a five-year period so that the new rent will not be paid in full until the sixth year of the new lease. This will give tenants a breathing space in which to adjust themselves to having to pay the higher rents.

Secondly, to encourage firms to take up quickly those factories which are, or may become vacant, we are prepared, during the next twelve months, to allow successful applicants for such factories a flat abatement of 25 per cent. on the current market value rent for a period of five years.

Mr. Thomas Steele (Dunbartonshire, West)

Will this apply to Northern Ireland, as well?

Mr. Rodgers

No, I do not think it will, for reasons which the hon. Gentleman well knows.

My next point relates to the clearance of derelict sites. I can inform the committee that we are prepared to consider, under the provisions of Section 5 of the Distribution of Industry Act, 1945, applications from local authorities in the scheduled Development Areas for grants towards the clearance of derelict sites with a view to their subsequent industrial use, or to improve the amenities of the neighbourhood. I have in mind the suggestions made for Coatbridge and Lanark. I hope that the hon. Members concerned will find the suggestions helpful to these areas as to other areas.

My right hon. Friends the Minister of Housing and Local Government and the Secretary of State for Scotland will shortly be informing local authorities in the Development Areas of the conditions on which grants will be available, and inviting them to submit schemes, which could be completed by March, 1960.

Mr. F. H. Hayman (Falmouth and Camborne)

Will these facilities extend also to the areas scheduled under the 1958 Act, such as Camborne-Redruth, in my own constituency?

Mr. Rodgers

I think I am right in saying "Yes", but I would like to check that.

There is also the postponement, in two instances, of sales of Government surplus, where this might prevent an increase in unemployment in particular industries. The hon. Member for Newcastle-upon-Tyne, West mentioned the machine tool industry. I have every confidence in the future of the machine tool industry, but for some time it has been suffering a slackening in demand, especially for certain types of tool, from both the home and overseas markets. This situation has in particular affected the lighter end of the trade, which serves predominantly the light engineering and repetition industries. Manufacturers have represented to me that their difficulties would be greatly accentuated if certain machine tools now held by the Government, and surplus to requirements as the result of changes in the defence programme, were to be offered for sale.

I am satisfied that most of the Government's surplus can be sold without danger to the interests of manufacturers and with real benefit to the community. There are, however, some types of machine produced by those sections of the industry which are at present in difficulties. The sale of these machines, if made now, might well reduce the number of men needed to make new tools. The Minister of Supply, at the request of the machine tool industry and after consultation with me, has arranged that the machines concerned should be withdrawn from the sales plan by the Ministry of Supply for this month and next. I have the assurance of the industry that this will remove the immediate difficulties arising from the disposal of surplus machine tools. My right hon. Friend's Department is considering with the Ministry of Supply and with the industry a disposal policy for the longer term.

This postponement of sales of surplus machine tools is complementary to the announcement made yesterday by the Minister of Supply that the Government would seek to sell a surplus of Army boots on the export market, but not to allow them to go on to the home market. Here, again, we are seeking to avoid difficulties for a home industry. It is a small step, but it is in the direction of trying to preserve employment.

Finally, a word about the cotton industry. Several references have been made to it in the course of the debate and not least by the hon. Member for Oldham, West (Mr. Hale). As I told the House last Tuesday, in answer to a Question by the hon. Member for Farnworth (Mr. Thornton), my right hon. Friend the President of the Board of Trade is keeping in close touch with the preparation of proposals for the reorganisation and re-equipment of the cotton textile industry. I explained that this work is being co-ordinated by the special development committee representing the main sections and both sides of the industry, which was set up by the Cotton Board in December.

Since my statement last Tuesday, my right hon. Friend has sent Lord Rochdale a letter in which he has again emphasised that the Government are most anxious that full advantage should be taken of the period of stability in respect of imports of cotton textiles from the Asian Commonwealth countries, to which it should now be possible to look forward. The undertaking of the Hong Kong industry to limit its exports came into operation at the beginning of the month and we trust that the agreements with the industries of India and Pakistan will be confirmed in the near future. These arrangements provide the opportunity to tackle with speed the problem of reorganisation and re-equipment which face the industry.

My right hon. Friend stressed the need for urgency and asked Lord Rochdale and his colleagues on the Cotton Board whether there was anything which the Government could do to help at this present stage, such as, for example, the appointment of a committee of inquiry, or possibly of an individual of the right status and qualifications, to draw up, or help in drawing up, plans for reorganisation. He repeated what the Prime Minister said at the Cotton Board's Conference at Harrogate, namely, that if the plan or plans produced by the industry involve a measure of direct Government help we should be prepared to give any such proposals the most careful and sympathetic attention.

I am sure that it will be recognised in Lancashire that there is no question of unlimited Government help. The terms of any proposed scheme will have to be looked at with the greatest care. In offering assistance during the preparatory stage my right hon. Friend has made it clear that his only concern is that the job should be tackled as quickly as possible by whatever method would be the most effective.

I understand that Lord Rochdale brought my right hon. Friend's letter before the Cotton Board this morning and that the Board has come to the conclusion that it would be quickest and most effective if it were to continue on the present lines. It fully shares the view of the Government about the urgency of these problems and it is confident that it will be ready with proposals sufficiently firm and comprehensive to justify discussion with Ministers in the course of the next few weeks. I think that the Committee will agree that this is very satisfactory. I can assure hon. Members that no time will be lost in considering the industry's proposals as soon as they are received.

Mr. Hale

When the Minister talks about "proposals" is he talking about proposals for loss of trade or for increased productivity and increased employment? We have talked about compensation for spindles before. If he is talking of the Government assisting with financing proposals for the expansion of the industry and of employment, he is making a statement of great importance, which we would all welcome.

Mr. Rodgers

I am referring to plans for reorganisation and rationalisation so that the textile industry will be able more effectively to meet competition from overseas.

I can now give an answer to the hon. Member for Falmouth and Camborne (Mr. Hayman). I thought that the facilities to which he referred applied to areas listed under both the 1945 and 1958 Acts, but I was wrong. It is only under the 1945 Act that we have powers to do this.

Mr. Hayman

Would not the Minister take powers to make some facilities available to the 1958 areas as to the 1945 areas?

Mr. Rodgers

I will give consideration to that suggestion, but I cannot give any assurance, as the hon. Gentleman will quite understand.

Mr. H. Rhodes (Ashton-under-Lyne)

Surely we ought to be thinking a little hit more forward than this. What the Minister has in mind means that some areas will be even more handicapped than they are now. Ought we not to be making preparations to allow those areas, in conjunction with the Board of Trade, to dispose of old and derelict buildings for something new?

Mr. Rodgers

That point will arise when we have considered the matter.

We ought not to make any definite arrangements until I have heard the Cotton Board's plans for the future.

I can assure hon. Members in all parts of the Committee that we at the Board of Trade want to do all we can to alleviate the anxieties of our unfortunate fellow citizens who find themselves unemployed today through no fault of their own. I assure hon. Members that we will consider most carefully any constructive suggestions which are put forward from whatever side of the House.

In the four months that I have been at the Board of Trade I have become convinced that there is no one easy solution to unemployment and that, just as the causes in various areas are complex, so the solution will be complex. But, given good will and understanding and a cessation of party strife on this matter we will, I believe, make real progress.

8.0 p.m.

Mr. John McKay (Wallsend)

Being restricted to about ten minutes, I do not want to go into political partisan points. The general discussion and the various points put forward in the debate have emphasised to me that the question of planning a great country with complex trades and giving a guarantee that we shall have full employment is one of the most difficult and intricate problems which exist for any Government.

The weakness in this discussion has been that one of the main principles attaching to the unemployment problem has been touched upon only very lightly, yet to me it is as vital as the problem of finding employment for unemployed men. In the docks it is recognised that there are regular times when there is a great deal of unemployment for the pool of workers, but there is a guaranteed income provided for the men who are not employed.

We have to recognise that the unemployed man is an economic unit of the nation. While we all admit that the chief part of the problem is to get men employed, there is a social obligation on us particularly in regard to the unemployed man because he is part of the active unit of the nation. We know that in practice unemployment will arise in various parts of the country to greater or lower levels, but all those unemployed people are needed to make for the economic health of the country. There is a national obligation, not only to find employment for the man who is out of work, but also to see to it that when he is unemployed he has a satisfactory income as a human being prepared to do work for the nation.

The National Coal Board has indicated the principle I am trying to emphasise. By its policy it has given an example to the country. Arising out of the difficulty in the coal industry, the N.C.B. has decided to do something special and out of the usual for its unemployed. It has established a redundancy benefit. I shall not go into details, except to say that the Board pays to the surface worker £3 8s. more than he gets in unemployment benefit and, to the underground worker, about £4 1s. 8d. more than unemployment benefit. That has been extended for six months, and the National Union of Mineworkers is trying hard to get it extended to twelve months. That principle ought to be established in industry generally.

I accept that the Labour Party as a Socialist Party, knowing the tragedy of unemployment and that it is an economic problem through which we all can suffer, should show a more sympathetic attitude to the unemployed. We can see a big problem in the country, but unless we have an active social conscience and use our mentality as well as our emotions in dealing with it we shall not solve the problem. If through great difficulties we cannot get the men employed, we should see to it that they get something reasonable in the shape of a special unemployment fund which would give them something like the unemployed miners get at the moment Would that be a tremendous thing to do? Would it cost the country a great deal? It would not do anything of the kind.

In official Answers to Questions last December, it was said that 6d. on the standard rate of Income Tax and 3d. on lower rates would bring in £140 million. Of that, £90 million would come from the standard nate and £50 million from the lower rates. If we put 3d. on the standard and lower rates of Income Tax—that is a small sum—it would bring in £95 million. Divided by 6 million unemployed, that would give £3 a week each on an average. That could be divided to give £2 10s. for the single man and about £4 for the married man. If our consciences are touched by this matter and we feel it such a tragedy to have 600,000 men unemployed, can we not say that this is a national problem which is quite apart from the question of pensions? The incidence of unemployment cannot be forecast. As important as trying to get men employed is to treat them decently when they are unemployed and to show that our sympathy is substantial and practical.

If the Labour Party put that in its programme it would show more intensity of interest on the subject than the Conservative Party. It would show that it is more determined than the Conservative Party to see that every man and woman in the country shall be employed so far as that lies in its power. Let it not forget, however, that in very serious circumstances it might fail to implement the policy of full employment. Let it go to the country and say, "If we do not solve the unemployment problem, by collective effort and just a small penalty we can provide a decent income for the unemployed and we shall do it."

8.10 p.m.

Mr. Charles Fletcher-Cooke (Darwen)

This debate has gone very wide and very deep. The speech of the hon. Member for Wallsend (Mr. McKay) was deeply sincere, even if I cannot agree with him that one of the helps which we might give to the employing capacity of the industry of our country at this time would be to increase its burden by more taxation.

It was the hon. Member for East Ham, North (Mr. Prentice) who raised the debate from the merely provincial level to a national level by discussing what was the cure for this problem. I am afraid that subsequently it went back again to the provincial level with a great number of speeches of competition in gloom to try to show that the particular pocket or area in which the hon. Member was interested was much worse than that of his neighbours.

The hon. Member for Leith (Mr. Hoy) did not perhaps delight in but certainly emphasised the fact that at last Scotland was blacker than Wales. I wondered what the purpose of these comparisons was. I supposed it was to try to induce the Government to switch into their area industries, and particularly light industries, which they thought might go elsewhere. I fear that I have a very limited view of the efficacy and the power to create employment by the Government switching light industry from one area, where it wants to go, to another area, where it does not particularly want to go.

The Borough of Darwen, which is in the middle of the weaving belt of the cotton industry, has taken, publicly and loudly, through the voice of its civic head, the mayor, quite the opposite view in the last few days. It has said that it does not want any Government help, that it is able to paddle its own canoe and that it is doing very well by diversifying its own industries without this direction from the Government. That, let me remind hon. Members, is from the very centre of an area which has been painted in such gloomy colours by hon. Members this afternoon.

I shall be interested to see whether that attitude—one of buoyancy and self-reliance and optimism—does not attract industry more readily than the opposite policy, which we have heard mostly today, of painting a gloomy picture of one's own area. If one does that, the industrialist or the undertaker, or whoever it may be who is thinking of setting up new business, is surely likely to say to himself, "There must be something wrong with folk in this place. They keep crying stinking fish. They must be in a terrible condition". Even if one is in a terrible condition one often does best not by presenting the gloomiest picture but by presenting a number of smiling faces, because the old adage, "Nothing succeeds like success", often pays a dividend.

That has been the experience of the Borough of Darwen, which I have the great honour to represent. They have publicly gone on record in this bouyant vein in the last week, and I venture to believe that that will be much more successful than trying to pretend to the outside world that yours is the blackest of black spots, blacker even than your neighbour's black spot, because, human nature being what it is, people are not attracted to black spots, even though ethically they perhaps should be.

If I do not believe very much in the efficacy of the Governmental switching of industry from one area to another, it behoves me, as it behoves everyone else, to say what we should hope to do to mitigate and cure this unemployment problem. For that purpose one needs to study the figures and to break them down carefully. I believe I am right in saying—and I am speaking in the broadest possible terms—that among skilled and semi-skilled persons there is still very little long-term unemployment. There is still a labour shortage for skilled and semi-skilled persons. That is nothing very surprising, but it is a fact. It is only among the unskilled that there is anything like chronic long-term unemployment, and in global terms there is not so much of that, although it exists.

Does not that show where the solution of this problem must lie? We all know that in a world of competition, not merely from Europe and the United States but from Asia and Africa, we have to become a nation of high-skilled employees. The greatest single factor which could reduce this mass of unemployed is to look again at our apprenticeship systems from both the employers' and the trade union point of view, because if we could raise some of the unskilled in their twenties and thirties, to the level of semi-skilled—and there is no earthly reason against it—and at the same time raise some of the semi-skilled in their twenties, thirties and even forties to the level of the skilled, I believe that a lot of the chronic long-term unemployment would disappear.

That means that employers, and particularly small employers, have to do a job which may not appear immediately very profitable to them. It also means that the trade unions have to raise their age limits for apprenticeship. I am convinced of that. I know that everybody thinks his own skilled trade is a trade which must be learned while in the teens, just as for many years the admirals thought it necessary for naval officers to start at fourteen. They honestly and sincerely believed that for many years, long after the invention of steam and the end of sail. We can all, from our own personal experience, find people who think that even in jobs which seem not perhaps unskilled but simple it is necessary to have a training while still under the age of twenty.

I believe that with good will on bath sides we could aim at a system of apprenticeship and of raising the level of skill for people who are thrown out of work in their twenties, thirties and even forties. I appeal to the Government to see whether some of the rules against older apprentices, which were understandable many years ago but which are out of date in modern techniques, could not be looked at again as a matter of urgency. It would have to be done with the co-operation of the craft unions and by a great effort by many small employers, who are not particularly keen on taking apprentices because they show no immediate return. On the whole, the larger employers take a longer view.

If that can be done, and if we can raise, not merely for the future but for the present, the level of skill in our community, then we shall meet all these fears which otherwise are very marked—the fears that automation and modern techniques will produce not more employment but more unemployment.

Dr. Dickson Mabon

The hon. Member used the phrase "not merely for the future but for the present". I agree with him to a certain extent about his argument for the future, but surely it does not apply to the present. Surely at the moment a large number of boys leaving school are unemployed and cannot get apprenticeships. Is it not also the case—certainly it is in my area, although I will not go into any competition in gloom in the matter—that skilled vacancies are scarce? Surely this argument is a long-term and not a short-term argument to overcome our present difficulties.

Mr. Fletcher-Cooke

I very much doubt whether, nationally, skilled vacancies are as scarce as the hon. Member says. I think that nationally there are a lot of skilled vacancies. I agree about the shortage of apprenticeships for school leavers, and that is why I was at pains to say that this is a matter where employers, and particularly small employers, have to be brought together and made to do a national job. It is a difficult thing for small employers to do because, by their nature, they are scattered, often not very well organised and often have not the forward vision of the large employer. I am sure that it has to be done and that if it is done now, not only for boys in their teens, but for unemployed in their twenties and thirties, there will be a general raising of the standard of skill from the semi-skilled to the skilled and from the unskilled to the semi-skilled.

I hope that hon. and right hon. Members on the Front Bench, particularly the Minister of Labour and National Service, are treating this as urgent. That puts the unemployment position very much in its proper perspective. There are now and will continue to be many vacancies for skilled men all over the country. The situation is not the same as it was in the 'twenties and 'thirties. I am convinced that it is the same with semi-skilled men. There will be an increasing lack of demand for unskilled people as our nation becomes increasingly dependent upon the rapid change in modern inventions. In the unskilled business in the world we do not want to compete, and cannot compete, with the emerging nations of Africa and Asia. They are bound to undercut us and no amount of compromise or tariffs or quotas or any artificial arrangement of that sort is going to stop that flow. We have to become very soon a nation of highly skilled people, all of us.

8.23 p.m.

Mr. Goronwy Roberts (Caernarvon)

I hope that the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) will not think that I am accusing him of provincialism when I say that I found his references to his constituency proper and attractive. He also said, which interested me greatly, that one of the problems was to raise the level of the unskilled to the semi-skilled and of the semi-skilled to the skilled. That is probably true of the traditional industrial conurbations of the country. The hon. Member for Oldham, West (Mr. Hale) referred to that in his own way when he was discussing the relationship between Oldham and Manchester. I can assure the hon. Member that in many areas in this country, particularly in the Principality of Wales—I am not being provincial now, but truly national—we have the semi-skilled and the skilled, but no work for them.

It is easy to suggest that these workers should pick up their families and homes and move to areas where there is more, but in practice it is poignantly difficult. In my own constituency we have a 10 per cent. unemployment figure. Many of them have been unemployed for three, four or five years. Not one of those 3,500 unemployed workers—and I know many of them personally—has been averse to moving to areas where there are greater opportunities. Many have done that and have had to return because of human and domestic difficulties which arose in their absence and on which I will not dilate.

Hon. Members on both sides of the Committee must appreciate that the problem is to get the work to the worker. A certain amount of mobility is necessary and essential, but let it be mobility within an area and not from one area to another. My hon. Friends from Scottish and Welsh constituencies will certainly agree with me when I say that we do not feel as regretful at seeing numbers of people moving from one part of Scotland to another or from one part of Wales to another as we are bound to feel when thousands every year leave Scotland for Kettering, the Midlands and this part of England and leave Wales for Rugby, Slough or London. The Scots and the Welsh have a double task in this matter, firstly to maintain full employment, and, secondly, to defend what we regard as the national fabric of our life. I hope that England never has to be obsessed, as some of us have had to be, with that side of the problem.

Through the Parliamentary Secretary, who I am sure will assist me in this matter, I wish to put to the Parliamentary Secretary to the Board of Trade two points arising from his statement a few minutes ago which affect those areas which are not scheduled under the 1945 and 1950 Acts but are scheduled under the Distribution of Industry (Industrial Finance) Act, 1958. The first point relates to the clearing of derelict sites. I emphasise that this concession to the local authorities must apply to unemployment areas outside as well as within the traditional Development Areas.

I represent a part of Wales which has for two or three centuries specialised in slate quarrying. The result has been magnificent roofs all over the world, but also a tremendous amount of debris and waste slate up and down Snowdonia. The problem is what to do with it. Those slate tips are in one of our major national parks. If this concession applies to clearing those slate tips, as well as the local slag tips in South Wales, we shall be doing two things. Firstly, we shall be adding to the amenities of a major national park, and secondly, we shall be providing work for some of the 3,500 unemployed of whom I am speaking. We shall also be preparing suitable sites for suitable industry in that area.

The second point which I hope the Parliamentary Secretary will press home with her colleague relates to rental concessions. I have spoken frequently in the House about the Nantlle Valley in my constituency in which the chief town is Pen-y-groes. I am glad to say that an admirable firm from Manchester has taken over a factory which was built there under the auspices of the Development Commission.

A second factory is on the verge of completion in that valley for the same firm. Will this rental concession apply in such a case as that? There cannot be many cases like it, and there certainly will not be any in future, because the new rule will overtake them. Here, we have a difficult area into which we have been able to attract a first-class firm, and it is a case in which the kind of concession mentioned by the Parliamentary Secretary to the Board of Trade will be of immense help.

The hon. Gentleman mentioned last year's Distribution of Industry (Industrial Finance) Act, which is supposed to assist industries to set themselves up in the unemployment areas that lie outside the traditional Development Areas. So far, that little Act with the very long and high-sounding title has been a flop, a farce—and something of a fraud. What is happening is this.

An industrialist applies to the Treasury Committee for a grant or loan to enable him to establish himself in, say, Caernarvonshire. He is told to apply to the banks, or to other normal sources of finance. He returns, and tells the Committee, "I have failed to obtain that finance from those sources," from which, apparently, the Treasury Committee then deduces that he is no good, in any case, and, for that reason, refuses him a grant or loan under the Act.

The position is illustrated by the Answers to two Questions I put to the Chancellor of the Exchequer. On 9th December last, I asked him: … how many applications for assistance under the Distribution of Industry (Industrial Finance) Act, 1958, have so far been received from Caernarvonshire; and how many have been rejected, accepted, and are still under consideration, respectively. He answered: Three firm and eligible applications have so far been received from Caernarvonshire. All three are now under consideration."—(OFFICIAL REPORT, 9th December, 1958; Vol. 597, c. 193.] That was not very many, so we waited until this month and put the Question again. On 3rd February, I asked the same Question and got this Answer: Four"— an increase of one in all that time— firm and eligible applications have been received from Caernarvonshire of which two have been rejected and two are still under consideration."—[OFFICIAL REPORT, 3rd February, 1959; Vol. 599, c. 40.] We will not begin to tackle the problem of these unemployment areas in Scotland, in Wales—or, I suspect, in Cornwall—until they are scheduled. In North-West Wales we now have between 5,000 and 6,000 unemployed. Surely, that is a large enough number to entitle us to be scheduled under the full Distribution of Industry Act. We qualify for it. I am quite certain that until we are treated as a scheduled area under the parent Act our problem will not be solved. It certainly will not be solved by the little Act of 1958.

8.34 p.m.

Sir Eric Errington (Aldershot)

I should have hesitated to intervene in this debate on behalf of my own constituency, which does not suffer from any degree of unemployment, but my excuse is that I was a member of the Sub-Committee of the Estimates Committee that considered the Development Areas, about two years ago. Incidentally, I live in Anglesey, and am well acquainted with the problems that arise there.

At the time of which I speak, I well remember that the Sub-Committee had considerable discussion on the importance of extending the Development Areas. The hoped-for extension does not seem to have materialised, as many of us thought it should and would.

I can confirm what the hon. Member for Caernarvon (Mr. G. Roberts) said about industrialists who seek to go to the areas to which the 1958 Act applies. It is extremely difficult for them to obtain financial assistance. That being so, the whole scheme for the extension of Development Areas is likely to fail. Some attraction must be provided under existing conditions, whether it be by way of the loan of cheap money or by other facilities. What struck me was the astonishing statement by the Parliamentary Secretary to the Board of Trade, in answer to a question, that these newly announced concessions applied only to the original Development Areas, and not to the 1958 extensions.

Better conditions are essential if we really desire to attract industrialists to these areas, which are of special importance because they have never at any time provided sufficient employment for the population. A period of five years with a reduction in rent of 25 per cent. is not much of a carrot to place before industrialists, and I hope that this question will be reconsidered. I suggest that, first, the provision should be extended to the 1958 Act areas and, secondly, that the period during which help is given should be extended and finally the amount advanced in appropriate cases be made more substantial.

Consideration ought to be given to the kind of work which can be done by the local unemployed people. It is easy to say, "We will build a factory which will employ so many people," and to consider that honour is satisfied by that building, but it is most important that the factory should be able to employ the kind of people who require employment in the area. If the area has many unskilled people who are unemployed, it is no use building a factory in which most of the employees require scientific degrees. It may help a little, but if this principle is extended to a large extent, as it sometimes is, a good deal of unhappiness and frustration is caused.

It was only because of the statement made by the Parliamentary Secretary to the Board of Trade that I felt that I should intervene to express my views on this vital matter.

8.40 p.m.

Mr. William Ainsley (Durham, North-West)

I hope that the hon. Gentleman the Member for Aldershot (Sir E. Errington) will forgive me if I do not follow him. I wish to refer to what the Parliamentary Secretary to the Board of Trade had to say in outlining the Government's proposals for what is to be done now and during the next four or five years. We shall have an election very soon. Moreover, when he referred to measures now being taken he omitted any reference to the stark fact that we have 624,000 unemployed now. That is the problem which we must face. That is why the Minister is asking in this Supplementary Estimate for £25 million.

When I have put Questions to the Board of Trade, I have been amazed at the complacency of the replies I received. I have been told "It is not as black as the hon. Gentleman suggests", or that "Several new factories have been brought into the County of Durham in the postwar period". We are all aware of that. "We are doing all we can to bring industry into the area," yet that is the kind of reply which we receive time after time from the President of the Board of Trade.

My mind goes back to the time when I read the first Cohen Report. I was alarmed then, on reading that Report, about what would happen in the vulnerable areas which we knew so well in the 'thirties. It is significant that Scotland, North-East England and Wales, plus Lancashire now, are again the areas to be affected. We on this side of the Committee know something of the "hungry 'thirties". There are still two nations within our one country. Hon. and right hon. Gentlemen opposite have not experienced the humiliation of joining the dole queue or the despair of not being wanted by society. These things come about as a result of deliberate Government fiscal policy in cutting down demand and reducing employment.

There is an old adage about carrying coals to Newcastle, and it applied, too, to the coal mines of the County of Durham. The trend is now reversed. Now, one could speak of carrying oil from Newcastle. The old coal mines in the west of Durham are feeling the effect of the state of our economy, and for that the Government must accept responsibility. We miners have always felt that we were an economic unit within the nation's economy. Because of that, there was no desire to bring other industries into the mining areas. Years ago, for example, there were what were known as the "Bevin boys"; there was exemption from military service for those young men so that manpower in coal mining could be brought up to a proper level. Good care was taken that no other industry came into the mining areas to compete for manpower where coal mining was the principal industry. Now, we are left with the problem in Scotland, North-East England, and in Wales.

The Government are now faced with the problem of redundancy in the coal industry because of their policy in seeking to withhold coal production. We lost our continental export market because of the Minister of Fuel and Power's policy to withhold supplies to meet the ever-expanding economy and industrial demand in this country. That is the problem which we have been facing in the mining industry.

I come now to the problem in my own constituency, which covers 264 square miles. Let me outline what has happened recently. The New Branspeth colliery and by-product plant, Brandon C pit, and East Hedleyhope colliery have all closed down. Production of fluorspar in the Weardale area is practically nil. The limestone quarries in Stanhope have been closed down and the small steelworks in Wolsingham is working half time. Nothing has been done by the Government to replace those coal collieries or declining industry in this area.

What has happened in the North-East? The Team Valley Trading Estate was set up to take the surplus in the Gateshead and Tyneside areas. The Aycliffe Trading Estate was set up to take the surplus population of Darlington. The West Auckland Trading Estate was introduced because in that area the whole of the coalfield was under water during private enterprise and before nationalisation. That came about under the Distribution of Industry Act which the Government have never sought to apply.

We are doing all we can to persuade industrialists to come to these areas and that is why we are left with the growing problem of unemployment. Since 1951, we have 10,000 immigrants from West Durham. Many of them have come to the London area. Only last week the London Press stated that London could no longer cater for any more industry. Can we wonder that there is a traffic problem in and around London when industrialists have been allowed to expand, when conurbations have gone up with a lack of planning? That is the condemnation of this Government, and until they take steps to remedy the wrongs which they have committed we shall find ourselves in this dilemma, whether it be in Scotland, the North-East or Wales.

I am governor of one of the secondary schools in my area which has 941 children on the roll. These are young people who are ready to come into the industrial employment market. Only today I revealed to the President of the Board of Trade that there is 8.3 per cent. juvenile unemployment, apart from the figures for adult unemployment which I gave a week or two ago, and there is no hope of their being absorbed in these areas, which problem is more critical. Where there is a diversity of industry it may be damped down by the present industrial recession, but where there is no other industry for the population it is a more acute problem.

As I pointed out to the President of the Board of Trade earlier today, a factory of 75,000 sq. ft. is standing idle in the area. Will he not make use of it and absorb these unemployed and the talent of these young people, which otherwise is being neglected? The Secretary of State for the Home Department will be introducing measures to deal with juvenile delinquency because the talent of these young people is not directed into channels of useful service for the good of the community. Therefore, I plead with the Government to take heed of our warnings and to apply these measures in the areas where they are urgently needed to solve the problem.

8.46 p.m.

Mr. Ray Mawby (Totnes)

I had not intended to take part in the debate—

Mr. Robens

I had.

Mr. Mawby

—but I have heard little all afternoon about the Votes that were put down for discussion. In fact, the whole debate seems to have been upon the effect—[Interruption.] Does the right hon. Gentleman wish to intervene?

Mr. Robens

I was not interrupting the hon. Member, but was merely observing to my colleague that I regarded the hon. Member's ignorance of procedure as lamentable in view of what he has just said. I was having a purely private conversation, but it is on the record now.

Mr. Mawby

I apologise for my ignorance, as I always do. All I said was that, looking at the Votes, I would have expected the debate to take a different form.

The suggestion has been made throughout the debate that we are suffering a high level of unemployment due to the policies of the Tory Government, which is deliberately trying to debase the currency to try to bring about a high level of unemployment. The suggestion was also made that this action was being taken by a group of people who knew nothing about unemployment and who were, therefore, not qualified to talk about it. It would be wrong for anybody to boast of what he knew about unemployment, but, certainly, I am not unaware of the conditions of unemployment, because I was brought up in a home which knew unemployment from time to time. Let me, therefore, declare my interest.

We are tending to beat the air about the whole question of unemployment. The suggestion has been made that throughout the period from 1945 to 1951 full employment was not only the standard aimed at, but was the standard achieved. The suggestion now made, however, is that we are suffering from a high level of unemployment. I need do no more than draw the attention of hon. Members to a Written Answer given by the former Chancellor of the Exchequer, now the Leader of the Opposition, who, on 22nd March, 1951, was asked to what extent the Government has adopted a full employment standard as proposed in the resolution of the Economic and Social Council of the United Nations in August last. The important point in the terms quoted in the right hon. Gentleman's reply was that The experience of the last few years has shown a level of about 2 per cent."— that is, of unemployment— at the seasonal peak."—[OFFICIAL REPORT, 22nd March, 1951; Vol. 485, c. 319.] Therefore, what we are arguing about now is 0.8 per cent. which is apparently the difference from a period when it was stated, and is still stated, that there was full employment, even though there was 2 per cent. unemployment at the seasonal peak. That was not an isolated case because, as the then Chancellor said, it was the experience of the last few years. Therefore, even in a period of full employment there was normally 2 per cent. unemployment at the seasonal peak.

Earlier today we were given the latest figures which show that at present we have a peak of unemployment of 2.8 per cent. I believe that that can be considered as the peak, because normally, after this time of the year, the figure tends to fall as a number of tourist industries and other activities come into operation. We are, therefore, comparing a figure of 2 per cent., which was apparently regarded as the level under a policy of full employment, against 2.8 per cent. which we have at the moment. It appears that there is a world of difference between full employment guaranteed by controls, restrictions and rationing and a policy of hell-for-leather under the Tory Government which is alleged to have brought about a high level of unemployment. We should look at this very narrow difference between us before we start throwing stones at one another.

The then Chancellor went on to quote the terms, as follows: It applies, of course, to the United Kingdom as a whole and does not preclude the possibility that in particular areas the percentage of unemployment might exceed 3 per cent. It was, therefore, generally accepted even at that time that while the national average could be reasonably low, that is, 2 per cent. then, there could be areas in the country where unemployment could reach a far higher level. All actions aimed at the redistribution of industry were designed to try to take up those areas where the unemployment figure was a great deal higher than the national average. And that is exactly the line that we are trying to follow at present.

It is important to remember, however, that in that Answer the right hon. Gentleman quoted further from the statement to say: In the event of severe difficulties arising in the sphere of foreign trade it is possible that even a level of 3 per cent. unemployment might be exceeded for short periods; but the Government would make every effort to avoid falling short of the obligation it has imposed on itself."—[OFFICIAL REPORT, 22nd March, 1951; Vol. 485, c. 320.] That, again, was a statement which was true then and is still true now. We are not completely masters of our own house. It was pointed out earlier that unless we can find markets for the goods which we wish to export, whatever we do we cannot guarantee full employment. I point out again, therefore, that the difference between us is one of .8 per cent., and all the remarks that have been made to the effect that the Government are deliberately trying to bring about a high level of unemployment show that the problem has not been properly looked at.

One of the Votes which we have been discussing today contains a very large extra Supplementary Estimate for the Ministry of Transport and Civil Aviation, to enable it to try to pump extra money into the road programme. We know also that extra money has been pumped into the railways, and that other measures have been taken to make certain that we prime the pump and try to keep industries going.

Let us not forget that while inflation is rampant we cannot guarantee full employment. There are enough statements on the record, made even by right hon. Gentlemen opposite when in office, that, if it were not for foreign trade, in time we should not have been able to purchase raw materials to keep our factories going, even in a planned and controlled State.

Therefore, I believe we should look at this question in the right way by applying our minds to solving this problem. I agree with many other hon. Members that one man unnecessarily unemployed is completely wrong. I believe that there is a certain amount of wasted skill and I agree that it is a disaster when any man loses his job. At the same time, do not let us instil unnecessary fear into the minds of many men now working. If we do that, while continuing to enjoy full employment they will always be looking over their shoulders in fear, and it is not right that we in this Committee should cause fear to anyone.

I believe that as long as we concentrate on the very narrow point of difference between us we can go forward together to find a solution of this problem. As the Leader of the Opposition has often said, and it has been repeated, it is the ambition of all parties to try to maintain as low a level of unemployment as possible consistent with preventing inflation.

9.1 p.m.

Mr. William Ross (Kilmarnock)

One thing which will give the Minister a certain amount of confidence is that no one will vote tonight against the Supplementary Estimates. The Minister is answerable only for getting and administering £25 million and, of course, he has an additional £5 million for National Assistance. This is something about which more might have been said.

If, today, there are unemployed people who cannot live on their unemployment benefit, and have to go to National Assistance, it raises the question whether or not those benefits are sufficiently high. One hon. Gentleman opposite, discussing this question outside the House, said that there was nothing to worry about because the unemployed have their unemployment benefits. I would not like to think that any hon. Gentlemen opposite were set to the business of living on unemployment benefit. If they were, they would not find it very pleasant.

My speech will be very sketchy. Inevitably, we shall have a Minister, as well as the hon. Gentleman the Member for Totnes (Mr. Mawby), telling us to take unemployment out of politics. I am certain that before long we shall have a Minister at the Box opposite telling us, "Let us take unemployment out of party warfare." The Prime Minister is the very man to do it. He will tell us that with all due gravity and solemnity. We get it on foreign policy and on housing—"Let us take this out of party warfare."

Despite everything said by the hon. Gentleman the Member for Louth (Mr. Osborne), I did not know why hon. Gentlemen opposite who support the Government are showing such concern about unemployment, since the policies they have supported in the Lobbies have been designed to create and to exaggerate it. The hon. Member for Totnes read the speech delivered by the right hon. Gentleman the Member for Monmouth (Mr. P. Thorneycroft) when he resigned his post as Chancellor of the Exchequer because the Government were not being tough enough. I advise him to read the speech of the present Chancellor, on his taking office. He thought that the Government were being tough enough, that their measures would do the job. Everything was designed to create unemployment. Now it has happened.

One of the tragedies of this business is that, after giving certain areas in the country special aid and guidance, as soon as we get a recession in trade and some unemployment those areas come out worse than ever before. There are now 115,000 unemployed in Scotland. What we are arguing about is not 0.8 per cent., but the fact that a year ago there were only 40,000 or 50,000 unemployed in Scotland. Unemployment has doubled. What we are arguing about is that when the Labour Party went out of office there were only 400 unemployed in my constituency, and many more vacancies than there are today. Unemployment in Kilmarnock is now not 400, but 2,000.

Those are the things about which we are concerned. The hon. Member for Totnes traced what he thought were the causes of unemployment. One of the first causes was the cuts in defence expenditure. If the cuts were to be made anywhere, they should have been made where their effects would have been felt least, and alternative employment should have been provided in the areas concerned. The credit squeeze also created unemployment, as did the financial restrictions imposed on the nationalised industries.

All those things have had their effect. At the Wallacetown Engineering works, in Ayr, 87 men were laid off. That is a firm making electrical switchgear for mines. The laying off of those men was directly related to Government policy, in the same way as the manufacture of locomotives in my constituency was affected by unemployment in the transport industry. Unemployment creates unemployment.

Another cause has been the muddle of the Government's Middle East policy. Hon. Members should consider the millions of pounds worth of trade which we have lost in Egypt and other parts of the Middle East. There are engineers in my constituency who were concerned with the maintenance of pipelines in the Middle East. Orders have fallen and we have lost millions of pounds worth of work as a result.

Another factor has been changes in techniques. There are men who are being made unemployed who will never again get jobs in the same area. The Government have a terrible responsibility. They are in a mess and they cannot get out of it. Unemployment is like getting into the Second Division in the Football League. It is easier to get into it than to get out, and that is what is now causing concern.

9.7 p.m.

Mr. Harold Finch (Bedwellty)

Tonight, we are being asked to pass Supplementary Estimates of £26,496,000 for the National Insurance Fund, of which £25 million is in respect of unemployment. That is a considerable figure and it was only to be expected that hon. Members would express their deep concern that the expenditure is largely due to Government policy, which has resulted in this serious unemployment position.

We are now becoming alarmed, especially when the right hon. Gentleman the Minister of Labour tells us that unemployment has increased since 8th December by another 89,000, bringing the present unemployment figure to 620,000. We are now well beyond the half million mark, and in those circumstances it was only to be expected that we should express our deep concern in the situation in which we now find ourselves.

One cannot help but feel that we are here investing in misery. This is certainly not investing in expansion and prosperity. This is part of the heavy price we are paying for industrial stagnation. Apart from the £25 million for unemployment benefit, as we were reminded by the Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance, there is the sum of £139 million, which includes the figure of £14 million as an additional contribution by the Exchequer under Section 2 (3, a) of the National Insurance Act, 1954. That provided for £325 million to be made available, if needed, for the five-year period beginning 1st April, 1955, to cover any deficits which might arise on the National Insurance Fund during that time. Until the current year, the Fund has shown the expected surplus, although on account of the growing number of elderly persons that surplus has been getting smaller. This is the first year in which the current expenditure of the National Insurance Fund will exceed the current income.

A few weeks before the Report of the Government Actuary was issued the Chancellor of the Exchequer put up the Bank Rate to 7 per cent. and initiated a much tighter credit squeeze. Here I wish to quote from the Report of the Government Actuary on the financial provisions of the National Insurance Act: … it has been assumed that unemployment will remain at its current level of about 1½ per cent. throughout the years 1957–58, 1958–59 and 1959–60, and will then rise to 3 per cent. in 1960–61 and reach the assumed long-term level of 4 per cent. in 1961–62. As I have said, a few weeks before the Chancellor had put up the Bank Rate to 7 per cent., and it was well known that the results of raising the Bank Rate would be that we would obviously have to face some degree of unemployment. I feel sure that if the Government Actuary had been told to take account of these facts he would not have put in a figure of 1½ per cent. but a figure of 3 per cent. This would have given him a slight margin to play with compared with the current rate of unemployment, which has now gone up to 2.8 per cent. for the whole of the country.

I submit that if the Labour Party had made this miscalculation or had misjudged the situation great play would have been made about the position. Indeed, it is interesting to note that when the late Sir Stafford Cripps had to come before Parliament with large Supplementary Estimates in 1949 and 1950 a first-class propaganda row took place in this House. Every Tory newspaper in the country carried the story of Socialist mismanagement, but hardly any comment is now being made in the Press on the figures before Parliament at the present time. I say that this is certainly a miscalculation of the position and that had the Government at that time made an estimate of 3 per cent, instead of 1. per cent., knowing that the Bank Rate had gone up to 7 per cent. we should not now be asking the House for this Supplementary Estimate of £25 million.

That is not the only consideration arising from this Supplementary Estimate. It has to be appreciated that unemployment benefit is not paid continuously to unemployed men. I do not know whether the Committee fully appreciates that situation, because the figures would be far worse than £25 million had it not been for the operation of the provisions of the National Insurance Act. After all, it was some years ago that we abolished Section 62, which was put into the National Insurance Act by the Labour Government, and it is unfortunate that that Section was not renewed by the present Government.

I would point out that Section 62 worked very efficiently and very fairly for the unemployed of this country. What did it really do? At the expiration of a man's standard benefit, he was liable to be called before a tribunal, when the position was made perfectly clear. If the Ministry of Labour were not in a position to say that they had found work for him, he was entitled to continue to receive unemployment benefit indefinitely. He might be called before the tribunal in connection with extended benefits, but so long as the Ministry could not find him employment he would receive unemployment benefit. There were rare cases where work was offered and refused. A man who refused work could be questioned about his position and unemployment pay would be discontinued because he had refused the work which was offered to him. That was an efficient and a fair way to work the unemployment benefit system.

This Government declined to renew that Section, with the result that although they put added days on to the extended benefit there was a limit imposed. The longest period for which a man can receive unemployment benefit is nineteen months. In many cases a man does not receive the benefit for as long as that; it depends on the contributions he has made. The unemployment benefit in many cases is terminated at the end of ten months or twelve months. We have the position, therefore, that a man who is faced with a prolonged period of unemployment automatically ceases to receive unemployment benefit after a certain period. Although these men are available for work, no work is provided for them. That is a serious state of affairs.

A few days ago my attention was drawn to the case of a man whom I have known for many years. He lives in South-West Wales near Swansea and has been employed all his working life in the tinplate industry. He is 55 years of age. He had saved sufficient money to buy his own house and he is a respected citizen. He is unemployed and, at the age of 55, he ceases to receive unemployment benefit. That man is broken-hearted. All he can receive now is the National Assistance payment, which he has never drawn before and has never desired to. Some men abhor National Assistance. Men who have worked hard all their lives look upon National Assistance as the last straw. It is right that in this debate we should draw attention to cases of that kind and the poverty and hardship which has resulted for many people because of this situation.

It is true that this additional sum of money is to pay unemployment benefit. Although the scales are inadequate, it must be paid for the maintenance of the unemployed and their families. It represents an appalling waste of human resources. Among those who receive unemployment benefit are many skilled men—craftsmen, engineers and miners—whose skill is now to be lost to the nation. All this is bad enough, but the figures which have been quoted represent men and women who are suffering hardship and will continue to be faced with insecurity.

It is true that the global figure for unemployment is not nearly so great as in the inter-war years, but in many areas it is worse. The situation is worse for a person who is unemployed today than it was during the inter-war years when wages were low and the standard of living far lower than it is today. I remember living in a depressed area for a number of years, and in many trades there was little difference between the wages received by the lower-paid workers and the unemployment benefit which was paid then. Today men earn perhaps £12, £15 or £20 a week, and many are committed to hire purchase payments. The man who has been earning only £8 or £9 per week falls to £4 per week. Others fall from £12 or £15. He may get assistance by supplementary National Assistance, but his position is more acute than that which was suffered in the inter-war years.

Unemployment not only results in poverty and misery, but it undermines morale and creates fear and frustration. I have been through it in the mining valleys of South Wales and I know what it means. It particularly hits the youth who cannot get work. Very serious issues arise when young men cannot get employment. It often engenders hatred. We remember the position in Europe in the inter-war years, when unemployment was one of the great issues and one of the factors which put Hitler into power. We are dealing with one of the most serious matters that can effect the people. It can have terrible effects; it can undermine democratic Government, in the last analysis. We desire to draw attention to the situation because so much evil is attached to it.

It has been frequently said by Government spokesmen that unemployment will be brought down considerably in the coming months. I fervently hope that that will be the case. I hope that the right hon. Gentleman will be able to succeed in bringing down unemployment in the next few months. Nobody will be more pleased than we on this side of the Committee, but we see no signs of that at the moment. If unemployment continues for any length of time it will have a serious effect upon the country's economy.

I do not want to repeat economic arguments which we have heard about unemployment. Such arguments have been expressed in this Chamber for the past twelve months. All I can say is that there is something wrong with an economic policy which fluctuates from inflation to unemployment and when a policy adopted deliberately by the Government creates unemployment in order to cure inflation. The Government do not seem to get upon an even keel. It has either to be inflation or unemployment. There can be no solution, as I think hon. Members on both sides of the Committee would agree, unless there is a steady flow of industrial expansion.

Unemployment is far more acute in some areas than in others. It is chiefly for those black spots that the Supplementary Estimate of £25 million is required. In certain areas, unemployment is terribly acute. Perhaps the Committee will pardon me if I refer to a few figures. I have taken past unemployment in some of these areas as at 14th April last year, at about the time of the Budget, and compared it with the position at 8th December last year.

In the West Riding of Yorkshire the figure in April of unemployment was 30,098, and it went up to 42,507. In the North-Western parts of the country the April figure was 73,193, which went up by December to 97,736. In the northern part of the country the April figure was 29,022, and it went up by December to 40,694. In Scotland, the April figure was 78,392 and it went up by December to 95,540. Now we are told that it has risen in Scotland to 115,000. That is a very serious matter. In Wales, the April figure was 36,815, and that has now gone up to about 39,463.

Calculated on a percentage basis, the Scottish unemployment is by far the worst. I understand that the latest figure is 5.4 per cent. In Wales the figure is more than 4.1 per cent. In Northern Ireland the figure is 8.3 per cent.

There is not only the problem of these areas, but of the pockets of unemployment in them. In North Lanarkshire, I understand, unemployment has reached 8.3 per cent. In North Wales it has gone to 10 per cent. and in South West Wales it is round about 7 per cent, or 8 per cent. These are serious pockets of unemployment. We are not dealing with amounts of 2.4 per cent. or 2.8 per cent., but with 10 per cent., 8 per cent. and 6 per cent., and to these serious pockets special attention has to be given.

I know there is no proper solution except by an expansion of the economy, but the Government could have exercised more effectively in these areas the powers given them under the Distribution of Industry Act. This problem has been going on for a considerable time. Section 3 of the Act provides for grants or loans to be made to local authorities. That does not deal with the problem of getting industry to the locality, but with the Government giving loans to local authorities for improving basic services in the area That was withdrawn by the infamous Circular 52/54 in 1952, and it has never been renewed.

The Government should at least have put it into operation as something which could have eased the situation. That would have brought down the amount of £25 million. It is better to have men at work on the roads than being paid unemployment benefit. In South Wales the roads are in a shocking state. They cannot hold the traffic resulting from industrial development in the valleys. What could we not have done with that £25 million in improving roads in Development Areas, or improving schools where classes have to be held in corridors, libraries or local chapels spread all over the district? We could have done something, with this £25 million to put men to work on the roads rather than paying them the dole. This is wasteful expenditure.

I emphasise that if the Government would now exercise their powers under that Section they could call the local authorities together and have a bold policy for the Development Areas. They could make grants as provided under the Act and get on with the job. I remind the Committee that those areas suffered in the inter-war years and they have not the social amenities which exist in more prosperous areas. In the valleys of South Wales local authorities have never properly recovered from the inter-war years. They lack social facilities. Here was an excellent opportunity for work to be done in those areas.

One happy feature I heard in the debate was when the Parliamentary Secretary to the Board of Trade, dealing with the powers of local authorities, informed us that the Government are now to exercise Section 5 of the Distribution of Industry Act whereby they will make grants for dealing with derelict land and buildings. I am very glad to hear that. In South Wales, as in other Development Areas, we have slag heaps and unsightly areas on which stood old buildings. I hope that the Government will co-operate with local authorities and give them every possible help, because here is a means of putting at least some men to work. Apart from work on the roads and these buildings, the other opportunities open under Section 3 of the Distribution of Industry Act could do a great deal to ease the situation and reduce the present unemployment.

Mr. Geoffrey Wilson (Truro)

Does the hon. Member appreciate that modern methods of road construction employ skilled men and that there is little scope for unskilled men? The days of the navvy have gone.

Mr. Finch

There are plenty of skilled miners quite capable of doing the work. I do not want to enter into this aspect, after the debates we have had on the Preston by-pass. I think we had better leave that side of the argument alone.

Another disturbing feature in connection with the present unemployment is the congestion which continually occurs in the Home Counties and the South of England. Yesterday the President of the Board of Trade replied to a Question which I had asked on Friday. I asked the amount of square feet of factory space which had been built in South Wales during 1958 compared with that built in the Home Counties. The President of the Board of Trade replied: Industrial building schemes, of over 5,000 square feet, notified as completed in 1958 totalled 2.6 million square feet in the South Wales and Monmouthshire Development Area, and 8.8 million square feet in the Home Counties …"—[OFFICIAL REPORT, 9th February, 1959; Vol. 599, c. 155.] In South Wales we are still not getting a fair proportion of these new factories, and Scotland is getting far less.

The position in 1957 was equally as had. No wonder there is congestion in the Home Counties. People are migrating from Wales to London and the Home Counties, which are becoming more and more congested. The whole balance of the population is being upset. As a result of the closing of the tinplate works and collieries, communities in South Wales are being isolated. There is no life left in some of the communities. Yet in the Home Counties we have a mass of population and congested areas.

In South Wales in 1957, we were told, only 1,580,000 square feet of factory space was built, whereas the figure for the Home Counties was 9 million square feet. The Minister says that these are extensions. What does he mean by that? They do not mean only extensions of buildings. They mean extensions of industry. We are getting a lack of balance in the industrial situation which is affecting unemployment.

There are one or two points I wanted to put to the Parliamentary Secretary to the Board of Trade. I am not clear about his statement on rentals. I was pleased to hear that at least the Government admit that these rentals have been too high and have prohibited industry from taking these premises. The Parliamentary Secretary has said that the Government intend to make some abatement in the rents, and we are glad to hear that, but I am not clear how it will work. Do I understand that the rentals will continue to be fixed by the Inland Revenue but that payments or allowances will be deferred for some years, although the amount will accumulate and in the end it will have to be paid.

Mr. J. Rodgers

The value of the rental will be fixed by the district valuer but the new rents will come into operation only over a five-year period. In the first year they will be 20 per cent., the second year 40 per cent., the third year 60 per cent., the fourth year 80 per cent., and the fifth year 100 per cent. At the end of the fifth year they will be paying the rental on the current value.

Mr. Finch

At the end of five years the full rent will be payable. Whilst we welcome anything that will assist the industrialists, I am not sure that that will be sufficient to meet the situation, but it is something which we shall have to consider.

In conclusion, we rightly claim that we believe in freedom and democracy. Freedom does not mean only freedom of the Press, freedom of speech and a democratically-elected Government. The essence of freedom is the right to work and to enjoy the fruits of one's labour. That is one of the human freedoms. I have had the pleasure of being at the Council of Europe where we are framing a Charter on Human Rights. One of the first Clauses in the Charter is the right to work and to full employment. That must be our aim and our policy. The Government have failed in that direction, and therefore they are not worthy to be supported by the people.

9.36 p.m.

The Minister of Pensions and National Insurance (Mr. Boyd-Carpenter)

The Supplementary Estimate which I presented to Parliament last week and which the Opposition, in the exercise of their rights, selected for discussion today, has given rise to an extremely wide and interesting debate. We have touched on economic policy, the trade cycle, policy in the Middle East and what Sir Hartley Shawcross, as he then was, did or did not do in connection with Far Eastern trade. We have also had a touch of theology from the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell).

A debate as wide as that, however, starting on so comparatively narrow a foundation is extraordinarily difficult to reply to at the end of the day. I make no complaint at all that within the rules of order the Supplementary Estimate has given rise to the debate, but it equally follows that hon. Members were perhaps less than generous to my hon. Friend the Parliamentary Secretary to the Ministry of Pensions and National Insurance when they criticised her, in introducing the Supplementary Estimate, for confining herself to the Estimate.

It was not for us from this Bench to anticipate the course of the discussion of the Committee, but, in the light of that, we have gone out of our way to oblige the Committee and facilitate the discussion, both by way of the statement made at an early stage by my right hon. Friend the Minister of Labour and National Service as to current unemployment figures and of the intervention and important statement made by my hon. Friend the Parliamentary Secretary to the Board of Trade on the measures being taken to stimulate employment, particularly in the more difficult areas.

Therefore, we can claim to have done our best to meet the point of view and wishes expressed on both sides of the Committee that the Supplementary Estimate should be used as a vehicle for the discussion of this immensely important problem.

The right hon. Member for Blyth (Mr. Robens) was a little less than generous to my hon. Friend the Member for Totnes (Mr. Mawby) when he told him that he knew nothing about procedure, because my hon. Friend had been under the impression that we might be discussing the Estimate which the right hon. Gentleman and his right hon. Friends had selected. My hon. Friend was perfectly entitled to assume that, and should not have been subjected to the right hon. Gentleman's rebuke.

Mr. Robens

The hon. Member for Totnes (Mr. Mawby) resumed his seat and invited me to repeat what I had been saying to my colleagues. That is all I did. I did not intervene in his Speech.

Mr. Boyd-Carpenter

I was only saying that the right hon. Gentleman's criticism, whether made sotto voce, or while he was on his feet, was in either case really wholly unjustified. I make no great point of it, but it would have been more natural, if right hon. and hon. Gentlemen opposite had wished to discuss unemployment, for them to put down for discussion the Supplementary Estimate of my right hon. Friend the Minister of Labour which has a subhead dealing with the special arrangements which he is making in discharge of his responsibilities in dealing with this immense problem. However, as I say, we have, to the best of our ability, served the Committee on the wider as well as on the narrower theme.

As the hon. Member for Bedwellty (Mr. Finch) made certain observations directly bearing on the Supplementary Estimate and did bring the debate back quite closely to it, I hope that the Committee will forgive me if I seek to deal first with some of the points he made. First, the hon. Gentleman asked why we should not, as a means of dealing with unemployment, increase expenditure on roads. He was reminded by one of my hon. Friends that roads are no longer what might be called the classical method, which they may have been in the old "pick and shovel" days, for providing additional work. That they do provide some valuable work I would not dispute.

If the hon. Gentleman looks at the Order Paper, he will see that there is on it down for discussion, if time had permitted, a Supplementary Estimate on behalf of my right hon. Friend the Minister of Transport and Civil Aviation which itself gives a clear indication of the expansion of road building which my right hon. Friend's energetic approach to these problems has brought about. We have, I think, no quarrel with the hon. Gentleman the Member for Bedwellty on that point, because we are, in fact, doing something along the lines he suggested.

I quarrel with the hon. Member for Bedwellty, however, over his remark about extensions in London and the Home Counties and in other areas of full employment. Where somebody wishes to extend an existing factory and it is plain that, if he is not allowed to do it, the extension will not be made at all, it does not seem to make sense to refuse him the certificate. Refusal will prevent the creation of industrial capacity which would otherwise be created. My right hon. Friend assures me that I.D.C.s for new work are not permitted in such areas as London and the Home Counties, but I cannot believe that it makes sense to refuse to allow existing industrial plant to have extensions which may well be judged necessary by those responsible for them in order to make for more efficient production.

Mr. Finch

Extensions do not mean extensions of buildings only. They may be extensions of businesses connected with the original undertaking. That is quite a different matter from the mere extension of an existing building. These are extensions of businesses, also.

Mr. Boyd-Carpenter

We would not quarrel about that, but the hon. Gentleman will accept that some of them are physical extensions of existing buildings Some are extensions of businesses, in the broader sense, I agree.

This is really a matter of definition. Where they are extensions of buildings, then, in the nature of things, one can extend only in or near where the place already is. It is quite right—and this is our present practice—not to grant certificates for entirely new developments, but where they are bona fide extensions required for existing buildings which will be made in the place desired or not at all, it is really unsound, unwise, and working against the efficiency of our economy, to refuse a certificate.

I agree with the hon. Member for Bedwellty that one must be satisfied that they are genuine extensions which do not disguise something new under the guise of an extension. That is a matter of fact in each case. He put the point of principle, and, on the principle of genuine extensions, I am quite satisfied that we are right.

Mr. Popplewell

I was very interested by this Ministerial approach to the matter of extension. The right hon. Gentleman and his Government will remember that, under the Distribution of Industry Acts, when first introduced, countless extensions of factories were guided where the people were in residence. In the North-East, we had in our trading estates many extensions to existing premises instead of people being allowed to extend at what I might call the parent place they came into the areas where they would be doing the nation more good.

Mr. S. O. Davies (Merthyr Tydvil) rose—

Mr. Boyd-Carpenter

I cannot give way twice. I hope that the hon. Member for Merthyr Tydvil (Mr. S. O. Davies) will forgive me.

What the hon. Member for Newcastle-upon-Tyne, West has done has been to blur the distinction between genuine extensions and new developments associated with some existing business but physically separate and separable from it. What we are concerned with here—and we need not quarrel on this, because the common sense of the matter will commend itself to the Committee—is where there is a genuine extension which, if not permitted at that particular place, will not happen at all. There is no point in cutting off one's nose to spite one's face.

Mr. Woodburn

We understand very clearly what the Minister has said. Is he giving an assurance that the 9 million square feet are all extensions of the kind he is describing?

Mr. Boyd-Carpenter

I am not talking about a particular figure, but if they are described as "extensions" they are, in the judgment of the responsible Department, genuine extensions. No one has any desire to allow this matter to be improperly administered. We are dealing with the general principle of extensions.

Let me deal with the question which was raised about assumptions as to unemployment made in respect of the main Estimate to which this one now before us is a supplementary. It has been rightly said that this is the first time that the 1954 Act, which authorises the Treasury to provide additional moneys over and above the fixed Exchequer contribution to National Insurance to meet deficiencies, has been used. It was used in our main Estimate for the current financial year, to which this is a supplementary, but I think that the hon. Member over-simplified the question of the assumption as to unemployment on which the Government Actuary works.

These assumptions are generally made over substantial periods. For example, under the hon. Member's own Administration the assumption made for some time was a rate of unemployment of 4 per cent., not necessarily related to what was precisely expected in any particular year but as a broad outlook for what is, after all, a long-term scheme.

We are dealing with the power to make deficiency payments. This is not quite like an ordinary Estimate, because this is expenditure which, if not met in this way, could be met by the accumulated balances of the Fund. The rules for Estimates which the hon. Member laid down do not apply entirely in the special circumstances of assumptions as to unemployment made on a long-term basis and in respect of deficiency payments which are only one of the means of meeting the expenditure. Looking back, I do not think that anybody was at fault in doing that.

The hon. Member returned, as he often does—I know that he speaks with great experience on these subjects—to the question of Section 62 of the original Act and, as I understood him, once again suggested that it should be revived. We have discussed this point many times, and, of course, it is a fact that that Section is relevant only if one expects really longterm unemployment.

Section 62 lapsed in 1953. It lapsed, as the Committee will remember under the original provisions of the 1946 Act and my noble Friend who is now Lord Ingleby did not extend it, but took no step to bring it to an end. It ended under the initial provisions of the 1946 Act but, at the same time, we provided for an increase in the added days which, in the case of the man with the best contribution record, runs up to 492 days. In those circumstances, it does not seem to me that Section 62, the resurrection of which hon. Members opposite urge again and again, is a particularly helpful solution unless one contemplates really long-term unemployment.

That is the difference between us. If we had had an opportunity to discuss the next Estimate I would have dealt with the question—but I think that you, Sir Charles, would rule me out of order now—of the very limited number of people who have exhausted benefit coming on assistance as a result of unemployment. There will not, however, be time to discuss that matter. Our view—and I accept that the hon. Gentleman's view was put in equally good faith—is that Section 62 is not the answer in present circumstances.

Miss Herbison rose—

Mr. Boyd-Carpenter

If I give way to the hon. Lady, I shall not be able to answer her hon. Friends who spoke earlier. I am sure that she will understand how I am placed.

Miss Herbison

I wish to raise only one point—

Mr. Boyd-Carpenter

I hope that the hon. Lady will not think me discourteous when I say that I was about to reply to her hon. Friend the Member for East Ham, North (Mr. Prentice), who referred to the figures given by my hon. Friend the Joint Parliamentary Secretary of the value in real terms of unemployment benefit now, compared with what it was in 1951.

The hon. Member took the point that my hon. Friend had relied upon the Interim Index of Retail Prices. That is true, but, as my right hon. Friend the Minister of Labour pointed out on Second Reading of the National Insurance Bill, if one takes other indices, for example, the one associated with the hon. Member for Reading (Mr. Mikardo), although there is a difference in the result, the difference is not significant in the sense of undermining the argument that there has been a substantial increase in real terms in respect of these benefits.

As my hon. Friend the Joint Parliamentary Secretary pointed out, that increase in real terms is more significant and larger in the case of unemployment and the other short-term benefits than in respect of retirement pensions, because the legislation for which right hon. Gentlemen opposite were responsible in 1951, although it increased many retirement pensions, left the original 26s. rate for unemployment benefit as it was. No one contends that even in those circumstances the level of benefit is lavish or anything of that sort, but it is, I am sure, a real help to those concerned. In the present situation it is encouraging to know that there had been this advance in values.

The hon. Member for East Ham, North referred to payments made by enlightened employers in cases of redundancy. Like the hon. Member, I welcome those payments when they are made. It is the mark of enlightened employers—I trust that I am not transgressing any rule if in that connection I quote the example of Lord Chandos—that such arrangements should be made. I hope that the Committee will acquit me of any political bias if I look at the action by Lord Chandos with the more enthusiasm when I recall that he was associated with my right hon. Friend the Minister of Labour in the Industrial Charter, which advocated very much that line of approach. Certainly, we want to see these things encouraged.

My hon. Friend the Member for Barry (Mr. Gower) made an interesting suggestion that there should be special rates of unemployment benefit in respect of long-term unemployment in certain special areas. There are difficulties about any such suggestion. In the first place, this is an insurance benefit and it would be difficult to allow different rates to be drawn by people, depending on the geographical area in which they happen to live. Secondly, long-term unemployment is just as hard on a man if he happens to be the only man in his village who is enduring it as if he is in an area where other people have the same misfortune. Although I understand the spirit behind my hon. Friend's suggestion, I do not feel that it is one we could adopt.

I have only a few moments to refer to the broader issue, but I take serious issue with the hon. Member for Newton (Mr. Lee) and with the hon. Lady the Member for Lanarkshire, North (Miss Herbison) in their suggestion—indeed, their explicit statement—that my right hon. Friends and I regard unemployment as an instrument of economic policy.

The hon. Lady went so far as to suggest that we seek deliberately to induce it for economic purposes. That is plainly not true. This is a live Committee and we can, of course, differ about the methods by which economic policy should be conducted and even the methods by which unemployment can be combated. But I do not believe that it helps debate on the subject to suggest that one side or the other of the Committee likes unemployment.

Miss Herbison

I did not say that right hon. and hon. Members opposite like it.

Mr. Boyd-Carpenter

I am obliged to the hon. Lady. It does not help any more than it helps for one side to call the other warmongers.

Reference has been made today to a leading article in The Times of yesterday, entitled "Froth". I believe that froth of that sort, imputing motives of that sort, does a great deal of harm to those who impute it and no harm at all to those against whom it is imputed.

My hon. Friend the Parliamentary Secretary to the Board of Trade gave a most interesting and powerful description of the variety of methods which the Government are using to deal with these problems of unemployment. My hon. Friend made some announcements of policy and development which I think are of very great interest to those who are closely concerned with this matter. The Committee will not expect me, in the few moments remaining, to attempt to go over that ground again. With respect, I would recommend those hon. Members who were not here at the hour when my hon. Friend rose to speak, to study the speech in the OFFICIAL REPORT tomorrow.

Suffice for me to say that the measures which we are taking fall into three categories. They are the economic policies working towards expansion and easier credit, which we have discussed many times in the Committee and no doubt will discuss many times more; the arrangements for developing the special areas procedure, to which my hon. Friend made particular reference, and the expansions made possible by last year's Act; and the transfer arrangements for which the Minister of Labour is responsible to help where the other methods do not prove successful.

These are three different classes of weapon in our armoury, and they are all designed to serve the same purpose. I resent a little the suggestion made once or twice in debate, though I hope not seriously, that we on this side of the Committee care less about this matter than hon. Members opposite. In the circumstances created by changing conditions of world trade, to which an island economy like ours, more dependent on international trade than any other economic society in the world, is particularly vulnerable, it is our aim and policy to secure that all efficient steps are taken to deal with this very real problem.

This Supplementary Estimate, of course, is not one of these methods. It is simply a method of supplying our social services, in which both sides of the Committee take pride to give help to those who are the direct sufferers from this state of affairs. I was glad to hear from the other side of the Committee that, in these circumstances, there was no intention of voting against these provisions. They will serve a valuable part in our armoury of social service instruments for helping those who need our help. It is in that spirit that I commend the Supplementary Estimate to the Committee.

Mr. S. O. Davies

The right hon. Gentleman dealt with extensions, in reply to my hon. Friend the Member for Bedwellty (Mr. Finch). It might interest the right hon. Gentleman to know, and I think that the Parliamentary Secretary to the Board of Trade will confirm it, that in areas in South Wales where the average unemployment has been from 4 per cent. to 5 per cent. in the last few years, extensions have been refused by the Board of Trade. I hope that the right hon. Gentleman will have a word with his right hon. Friend the President of the Board of Trade on the matter.

Question put and agreed to.

Resolved, That a Supplementary sum, not exceeding £26,496,000, be granted to Her Majesty, to to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1959, for sums payable by the Exchequer to the National Insurance Fund and the Industrial Injuries Fund and for payments in respect of family allowances.

To report Progress and ask leave to sit again.—[Mr. Bryan.]

Report of Resolution to be received Tomorrow; Committee also report Progress; to sit again Tomorrow.