HC Deb 14 July 1971 vol 821 cc679-88

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

12.24 a.m.

Mr. T. W. Urwin (Houghton-le-Spring)

I am pleased to have the opportunity to raise this vitally important subject of employment opportunities for young people in the Northern Region. When we look at the question, it is well to recall as Members of Parliament the very deep and abiding interest that many people have in it. I am sure I speak for every one of my colleagues in the Northern Region when I say that we have been extensively lobbied by authorities such as the Durham County Council, educationists and others who never cease in their exhortations to us to attempt to do something in Parliament to remedy the present appalling situation. It is a situation which responsible commentators, including the National Association of Career Teachers, have stated is as bad as, if not worse than, any since the war.

Despite the present difficulties, within the next few days the already grossly swollen ranks of unemployed youngsters will be unhappily augmented on a national basis by the decanting of 700,000 school leavers on to the intensely competitive labour market. It is by this time a well-known fact that all the development areas are heavily hit by the economic recession which has been with us for far too long. This is especially applicable to the Northern Region.

It is rather tragic that under existing regional policies industrial development is being seriously retarded. The pace of new job generation has slowed very considerably. Worse still is the fact that numerous well-established firms in the North have discarded labour. A recent Department of Employment statement indicates that almost 10,000 jobs—indeed, it may be more than 10,000 by this time, as the Written Answer is now a few weeks old—have been lost since June, 1970 due to this factor.

One can readily understand that the spectre of unemployment haunts thousands more people in the Northern Region at present in work. The vulnerability to unemployment and long inestimable period of inactivity by people of all ages has been clearly and ruthlessly exposed. In shipbuilding and allied industries, in engineering, in construction, many youngsters have had to accept the inevitability of termination of apprenticeships, in many cases without hope of transfer to another employer and often at an age when it is too late to take up an apprenticeship in another craft.

It is against this background of seeming hopelessness amounting to almost black despair that thousands more youngsters will join their 4,785 cousins chasing all too few jobs in the Northern Region within the next few days, many of them facing the ignominy already felt by an unemployed parent or a relative. There are many families in the region and in other development areas where unemployment is not singular to one member of a family. Indeed, in the County of Durham, with already over 20 per cent. of the region's youth unemployed, 1,080 boys and girls were registered in June, representing 54.73 per cent. more than in June, 1970. This is a staggering increase by any standards, but much worse in Durham by the imminent discharge of over 5,000 school leavers, all competing for a mere 530 notified vacancies.

I turn briefly to my own constituency. In the careers office in Houghton-Ie-Spring 87 boys and 41 girls are currently unemployed. A further 281 boys and 287 girls are due to leave school this week. The gross totals, therefore, are 368 boys—who will find themselves in the hopeless position of chasing 15 notified vacancies—and 328 girls—who will be competing for 31 notified vacancies. That is an appalling situation for those young people.

Throughout the region the story is very much the same. From the heavily industrialised areas of Wear, Tyne and Tees to the urban and rural districts of Durham and Northumberland the outlook for young people is decidedly black. Careers officers, performing a valuable but unenviable service, have circulated employers throughout Durham in recent weeks, but with very little success. From the replies—indeed, a number of firms have not deigned to reply—it becomes clear that opportunities in the construction industry are greatly reduced. Craft apprenticeships, including those in the engineering industry, are down ; in banking, one of the Big Five banks has only 20 vacancies this year, as opposed to 200 last year, and factory vacancies have been considerably reduced, in this case to a greater extent for boys than for girls.

Placing difficulties are being experienced at all academic levels. It now emerges that academic ability is no guarantee of employment on leaving school. I submit that millions of pounds have been properly invested upon the education of these young people, but tragically more millions of pounds are being expended in unemployment and supplementary benefits payments.

This situation creates and encourages a serious social problem as idleness and sheer boredom arising from unemployment themselves foster unworthy thoughts and equally unpraiseworthy actions. I ask the Minister what the Government propose to do to harness these valuable assets of young people ; to provide the jobs which they have a right to expect to ensure their respect as responsible members of the community, playing their full part in the drive towards the increased productivity that this nation so badly needs.

What must now be done is to ensure a greater share of Government office dispersal in the North. We have been concerned recently about the decision to allocate the headquarters of the value-added tax administrative establishment to Southend rather than to a development area. We have lost that battle, but surely it is not too late for the Minister and the Department of Employment to put their weight behind the effort to ensure that the P.A.Y.E. computer centre, which was allocated by a Labour Government to Washington, is not lost for all time. If there are to be. reductions in the numbers of centres I hope that they will try to ensure that Washington is not left out on this occasion. A project of that kind guaranteeing about 2,500 to 3,000 jobs, and ensuring a steady flow of new jobs for a number of schoolchildren with fairly minimal academic attainments, is an absolute necessity for the Northern Region.

Members of the Northern Region group this afternoon met the Secretary of State for the Environment, and this was one of the questions raised with him. I urge the Under-Secretary of State to use his good offices and his influence to ensure that the North is not left behind in the race.

The hon. Gentleman could usefully spend some of his time, busy though he undoubtedly is, in trying to encourage the Government to give new stimulus to the economy. It is frequently said that reflation can be the salvation of the development areas. I myself do not wholly agree with that premise, for it is well known that, even in times of reflation, it is the poorer areas of the country, the development areas, which benefit last of all. But, clearly, we should be grateful for an expansion of the kind which is now required. Such expansion would definitely encourage industrialists to recruit more apprentices, more trainees and more young people generally.

The evidence presented to the Government so far on their regional policy shows a dramatic slow-down in the generation of new employment opportunities. They should abandon their political dogma on the subject of investment grants. I plead with the hon. Gentleman to use his influence with his colleagues in the Government so that we revert to the system which I have frequently called the linchpin of the incentive policies for the development areas instead of replacing it by tax allowances. I have no doubt that this would materially assist the resumption of the inflow of new industry into the development areas.

I put it to the hon. Gentleman, also, that the Government could consider utilisation of the resources of the industrial training boards to establish off-the-job training facilities for suitable school leavers. They might, in addition, consider developing the use of Government training centres—this certainly would be an innovation—for people under the age of 18, and preferably, of course, after consultation with the trade unions, concerned, even though it might well mean providing training facilities for people some time in advance of an employment opportunity occurring.

The Department ought to encourage employers to recruit more than their requiremen of young people, starting now, as an insurance against the raising of the school leaving age in 1973. At that time, it will be increasingly difficult for employers to recruit the requisite number of young people for the jobs which will then be available to them. This, surely, is within the province of the Department of Employment, and the Minister could talk to employers and try to persuade them to accept that principle.

Every conceivable effort ought now to be made to ensure that careers officers themselves, valuable as their services are to youngsters about to leave school, do not have to spend the greater part of their time counselling young people on the problems of unemployment.

12.40 a.m.

The Under-Secretary of State for Employment (Mr. Dudley Smith)

The hon. Member for Houghton-le-Spring (Mr. Urwin) has rightly expressed his concern about the employment position facing young people in the Northern Region. I assure him and all hon. Members representing Northern constituencies that my right hon. Friend the Secretary of State and I fully share their concern.

As my right hon. Friend said on 28th June, … the Government are absolutely determined to halt and then reverse the upward trend in unemployment."—[OFFICIAL REPORT, 28th June, 1971 ; Vol. 820, c. 154.] He went on to say that the unemployment was least tolerable in those areas where levels of unemployment were higher than the national average, as in the Northern Region.

There can be no doubt that unemployment among young people in the Northern Region is a serious problem. In June, 4,700 of them were registered as unemployed. That was slightly less than the May figure, but it was much higher than the figure for June last year. Indeed, it was the highest June figure since 1963. Unemployment is higher in all parts of the region, as the hon. Gentleman reminded us.

In June there were 2,400 vacancies. That is considerably less than a year ago, but the drop may be partially explained by a change in procedure whereby the June figures do not include vacancies for summer leavers. The ratio of notified vacancies to unemployed young people is distinctly less favourable in the Northern Region than in the country as a whole, particularly for boys. There is only one notified vacancy for every three unemployed boys in the region.

As to the position of school-leavers, at a rough estimate we expect about 27,000 young people to leave school in the Northern Region at the end of this summer term, which the hon. Gentleman has told us is a matter of days. That is about the same number of young people as last year. Reports from careers officers suggest that placing them will be more difficult than last year, and it will take longer. In 1970 the bulk of summer leavers were absorbed into employment by mid-September, and only 5 per cent. had not entered their first jobs by mid-October. Reports from careers officers suggest that this year the school-leavers will get jobs more slowly. Even so, and despite what the hon. Gentleman said—I know that he said it with great sincerity—I hope that the majority will obtain work within a reasonable period of leaving school. The greatest difficulties will inevitably be experienced by those who are less able and have fewer qualifications.

The hon. Gentleman asked what we shall do to improve the position. I turn first to the action being taken within my own Department's field of responsibility. First, careers officers are making strenuous efforts to canvass employers for additional vacancies. I should like to take this opportunity to pay tribute to the efforts of the careers officers in an admittedly difficult situation. They are trying extremely hard and they have made progress.

Second, my right hon. Friend has agreed to grant-aid five additional careers officer posts in the Northern Region to see whether, by giving more professional time for interviews with young people and employers, unemployment can be reduced. That is over and above the other additional posts being provided in the region for expansion and development of the Youth Employment Service. Five additional careers officers may not sound very many, but the national figure is only about 20, so we can see that the percentage increase for the Northern Region is considerable.

Third, where appropriate, careers officers are encouraging young people to stay on at school. It is disturbing that despite its unemployment problem the Northern Region has a significantly larger percentage of young people leaving school at 15 than the country as a whole. I sympathise with those in the North-East who are trying to rectify that position even before the raising of the school-leaving age, which is due in 1972–73

Fourth, my right hon. Friend believes that there may be a need for special provision for training unemployed young people—the hon. Gentleman specifically asked me about this—particularly the 16 and 17 year olds who have already had one or two jobs. There are not enough opportunities for these young people and I am glad to be able to tell the hon. Gentleman that my Department has agreed as an experiment to pay for training courses in semi-skilled workshop practice at three technical colleges in the North-East—on Tyneside, at Sunderland and on Teesside. It is hoped that these courses will start in September. I believe that it will be beneficial to see what results come from the experiment.

Finally, following approaches from a number of local authorities in the North-East, which the hon. Gentleman no doubt knows about, arrangements have been made for a meeting in Newcastle next week between these authorities and representatives of the Government Departments concerned to discuss questions relating to employment, education and training of young people. The meeting will be chaired by the Chairman of the Central Youth Employment Executive and serious consideration will naturally be given to the views put forward by the authorities and the experts who will be there.

I should like now to deal with the more general problems of the area, of which the employment problems of young people are a part. The first, indeed the major priority, as the hon. Gentleman himself suggested, is more jobs. The hon. Gentleman spoke about the contribution which the dispersal of Government offices can make by providing job and career opportunities for young people. At the end of last year, in our White Paper on the machinery of Government, we announced a searching review of dispersal policy. This is well under way. It is our intention to get as much Civil Service activity away from London as we can, consistent with the efficient operation of the public service. I assure the hon. Gentleman that, in looking at this matter, we have the needs of the Northern Region and the other development areas very much in mind.

Mr. Urwin

Can the hon. Gentleman give an indication as to the completion dale of the review, which has been going on for some time?

Mr. Smith

The hon. Gentleman will appreciate that this is not the responsibility of my Department but I will write to him if I can get any further information. Without notice, I cannot tell him the completion date.

The hon. Gentleman knows from his own experience in office that the operational requirements of the public service must sometimes conflict with regional objectives. In the case of the value-added tax centre, it would not have been possible to meet the date for introducing the tax if we had tried to locate the central control centre anywhere else than Southend, where much of the skilled customs staff is already located, but 75 per cent. of the staff will be located in other parts of the country and there will, of course, be local offices in the North-East. Of course, we recognise the disappointment that this decision, coupled with the rundown of the Land Commission and the investment grant office at Billing-ham, may cause, but we are determined to pursue a vigorous dispersal policy. We are extremely sorry about the disappointment caused.

The hon. Gentleman raised the question of the P.A.Y.E. centre. As he will appreciate, he cannot expect me to give an answer on that, but I assure him that my right hon. Friend the Chancellor of the Exchequer will take due note of his views and those of other hon. Members, and that applies also to the question of reflation and changes in economic policy. I have said that the first priority is clearly more jobs. Regional incentives to industry are the responsibility of the Department of Trade and Industry, but I should like to refer to them briefly, because they are part and parcel of the difficulty which we are experiencing in the North. They have an important part to play in helping to solve the problem.

The Government announced last October improved assistance, under the Local Employment Acts, tied to the provision of new employment—a 10 percentage point increase in building grants, more flexible use of loan powers, and there will be additional expenditure on grants for the provision of basic services and the clearance of derelict land. Also in October the Government announced that investment grants for plant and machinery would be replaced by accelerated depreciation allowances for tax purposes. In development areas, firms may write off for tax purposes the whole of the cost of eligible assets in the year in which the expenditure is incurred.

In February, we announced the new special development areas, which include Tyneside and Wearside, and increased the rate of operational grants from 20 to 30 per cent. In the Northern Region there are now 45 per cent. of the insured population in the special development areas as compared with 19 per cent. before the change. That is significant and important.

The Government believe that the new package is directly relevant to the needs of the less prosperous areas. It deliberately shifts the emphasis away from indiscriminate subsidies, such as investment grants and R.E.P., and puts greater weight on assistance geared to the provision of new employment and incentives designed to encourage profitable and efficient investment.

The Government have decided to make, subject to the fulfilment of certain conditions, a grant in aid of £20,000 to the North-East Development Council. Under the last Administration, it was decided to end the council's £10,000 a year grant, but, in view of the importance which we attach to its promotional work, we looked at the position again, and this is the result.

In conclusion, I say to any Northern M.P. who is troubled, as we all are, about unemployment among the young—for great humanitarian principles are involved—that the Government are genuinely concerned about the present level of unemployment among young people in the Northern Region. Various ideas about curing it have been put forward from both sides of the House. It is a matter constantly under review by the Ministers concerned.

I have described the measures which the Government are taking and I believe that in time they will bring about a much needed improvement in the situation. Indeed, I am confident that an improvement will take place. In the meantime, my Department will do everything it can to alleviate the position of these young people who find themselves, unfortunately, without employment when they leave school.

Question put and agreed to.

Adjourned accordingly at six minutes to One o'clock.