UNEMPLOYMENT

HC Deb 24 July 1975 vol 896 cc782-91

The Secretary of State for Employment (Mr. Michael Foot)

With permission, Mr. Speaker, I will make a statement on the unemployment figures published today.

The figures show that the total unemployed in Great Britain on 14th July was 1,036,000. [HON. MEMBERS: "Disgraceful."] This includes 92,000 students who will leave the unemployed register in the autumn and also 55,000 school leavers whose numbers we must expect to increase over the next month or two.

Seasonally adjusted, the total is 938,000. This represents an increase of 74,000 since June, which compares with an average rise of 47,000 over the three preceding months.

The House will share my deep concern at these figures, and I have no wish to minimise their gravity. And we must face the fact that the level of unemployment is likely to continue upwards in the months ahead until the counter-inflation policy and other Government policies take effect and world trade begins to improve.

One fundamental requirement before we can secure a substantial improvement is to bring down the domestic rate of inflation. Meanwhile the Government will take such measures as are open to us in our difficult economic situation to help those affected.

We have already allocated £50 million to the Manpower Services Commission to strengthen training programmes, improve the employment services and provide additional incentives for job mobility. These measures include provision to assist the training of an additional 30,000 people, bringing the total we aim to assist to nearly 100,000 in 1976.

A further package of measures is now being worked out with the MSC and is being put into effect at once. This will make it possible for a further 6,000 young people to obtain skilled training this year and will provide for a strengthening of the careers service. The cost will be £10 million spread over this and the next financial year.

We shall introduce our temporary employment subsidy scheme as soon as possible and I shall be announcing the details and starting date very shortly. We are also considering what further temporary measures might be possible to encourage the employment of young people in industry.

These measures can help, but of course, I cannot pretend for a moment that the number of jobs maintained and provided by these means will alleviate substantially the tragic total published today.

If we are to see these figures effectively reduced, we must secure the expansion of our economy as a whole and the fresh investment and confidence required for that purpose. The Government's anti-inflation policies are an essential part of that purpose.

Mr. Prior

Is the Secretary of State aware that the whole House will be shocked and deeply disturbed by the trend in the figures that he has announced? There will be no hysterical reaction from the Opposition Benches as there was on the last occasion when the figures reached, at the top of the cycle, just under 1 million. Some of us feel that on this occasion it might have been appropriate if the Prime Minister had been here during Question Time, in spite of his obvious commitments elsewhere, because this is an important occasion for the nation.

We are now at the beginning of the price we are having to pay for the electoral bribes and inaction and the total failure of the Government to deal with inflation. Is the right hon. Gentleman aware that the action on school leavers that he has announced, coming some two months after the debate in this House when we drew attention to that fact, is far too little for what is required? We would much prefer that more cash was devoted to helping school leavers and creating skilled jobs in the next few months than to extra subsidies on food and rents as have been announced. If the right hon. Gentleman asks his constituents whether they would prefer to have their children in work, doing something useful, or to have to pay a penny less for bread they will give him the answer.

Is he aware that he has a very special responsibility for employment, not least because of the remarks that he and some of his right hon. Friends have made over the last few months? We on the Conservative Benches have had to endure—and it has been endurance—some of the bribes and taunts—[HON. MEMBERS' "Oh."] I meant to say jibes and taunts, but there have been a good many bribes, too. We have had to nut up with jibes and taunts of Labour Members about our being the party that wanted to cause unemployment. Not only do we reject that, but we think that in the circumstances the Secretary of State should stop hawking his conscience around the House and the country and resign.

Mr. Foot

I do not believe that in the face of the figures the country is interested in jibes and taunts, from whichever quarter they may come. The country will be concerned about how we are to get these tragic totals down, and it is upon that that I should like to concentrate in replying to the right hon. Gentleman.

As for the programmes for school leavers and for training, as I have already indicated we shall do everything we can, but of course there is proper timing for proposals about school leavers, and I am sure that the right hon. Gentleman would have appreciated that.

As for the past, if we were to go back and examine all the reasons for unemployment we would have to look not merely to this country but to other countries as well. The major cause of our present situation and of the tragic unemployment figure is the general recession which has hit so many countries.

The seasonally-adjusted figure is a tragically high total for this country and represents 4.1 per cent of the employed population. In France the figure is 5.1 per cent., in Germany 5.6 per cent., in Holland 5.4 per cent. and in the United States 8.6 per cent. In the face of those figures, it is absurd for anybody to suggest that the major cause rests with the present Government. It is a recession which has hit the whole Western world and we must do our best to devise our own methods to save ourselves.

Mr. Ashley

Is my right hon. Friend aware that although the unemployment figures are deeply disturbing, his lack of complacency is in striking contrast to the attitude shown by Conservative Members during the three-day week and the time when the unemployment rate was even higher? Would he agree that the best way of bringing down the figure of unemployment lies in the success of the Government's anti-inflation policy and that those hon. Members on either side of the House who undermine that policy thereby undermine the prospects of the unemployed?

Mr. Foot

I am grateful to my right hon. Friend for his remarks. He is correct to say that the first necessity is to carry through the policy which we are now discussing. However, I am not saying that that is the only way in which we can tackle the problem. I have sought to indicate the immediate first-aid measures which we should seek to take, but we must consider other measures as well. We must consider a whole series of measures to try to tackle this appalling problem.

Mr. Madel

Do the Government intend to pay the temporary employment subsidy only to firms in development areas? If so, will he remember that many firms have some of their plants in development area and some, say, in the South-East? Therefore, difficulties in the South-East can threaten plants in development areas. What is the Government's final thinking about where these employment subsidies will be paid?

Mr. Foot

Our original idea when we were studying the plan was that it would apply to development areas. I agree that there is a strong case for extending it to wider areas. That is what we are contemplating and I shall make an announcement on the subject next week.

Mr. Mendelson

I accept that the main causes of the rise in unemployment are international and due to the cyclical depression that occurs in the capitalist system from time to time—[HON. MEMBERS: "No."] Conservative Members do not like to hear these things because they are adherents of that system. Will my right hon. Friend accept that it is now urgently necessary for the Government to bring together those who are responsible for large-scale investment in this country so that the Government can come to quick agreements with the investment companies and the various consortia—in other words, with those who control the investment companies—to take immediate action and, if necessary, to take governmental powers to direct some of the investment to where it is most needed?

Mr. Foot

I listened with care to my hon. Friend, as indeed I did to his speech in the debate on Tuesday. One essential requirement to overcome the unemployment problem is that there should be a great improvement in the ways in which investment in this country is allocated. These are urgent matters and relate to some of the measures which are now passing through the House.

Mr. Cyril Smith

Is the right hon. Gentleman aware that any denial of the right to work is soul-destroying and degrading to the individual concerned? Will the Government seriously consider using some of the ideas outlined by the hon. Member for Salford, East (Mr. Allaun) to ensure that State money is paid to help a man to work rather than to put him on the dole, even by using schemes of social employment and similar measures? Will he further consider, in respect of retraining programmes, the gross under-usage of technical colleges and the advanced equipment available in those colleges which might be used to help to bring about a greater degree of retraining?

Mr. Foot

I fully accept the hon. Gentleman's remark about the horror of a man being thrown out of a job. Furthermore, we must consider the fear that spreads throughout the rest of the community. I do not under-estimate these matters in any way whatever. I also fully appreciate that the House wishes to examine long-term measures to overcome these problems and also wishes to see what short-term measures we can devise to assist in solving the problem. We have been discussing such measures with the Manpower Services Commission, and we have those proposals fairly well advanced to be brought into operation.

The temporary employment subsidy is a precise example of what has been outlined by my hon. Friend the Member for Salford, East (Mr. Allaun). The financial economic basis on which we have worked out some of these measures envisages that it would save the amount of money which we should otherwise have expended in unemployment pay. I hope next week to be able to announce a general outline of our plans in this connection. I must emphasise that although unemployment is an appalling event, it would be even more cruel to mislead the people about how it can be cured. The measures which I have outlined ale not a full cure, and I cannot pretend that the proposals which I am making will tackle the whole problem. I have to say that because I do not want to deceive anybody.

Mr. Alexander Fletcher

Is the right hon. Gentleman aware that the Chancellor of the Exchequer projected for the autumn of this year an unemployment figure of 1 million, and of course we are now faced with that very figure. Will the right hon. Gentleman complete his statement to the House and reveal the Department's projections of unemployment by the end of the year?

Mr. Foot

Such projections are not normally given to the House—for a variety of reasons, relating not merely to my Department's projections, but to those in the Treasury. It is not the custom for those figures to be put forward. In view of figures published during the week envisaging a figure of 1,500,000 unemployed by the middle of next year, I should point out that these are not figures which are available in any Government Department. The situation is serious enough already without people raising scares about an even more serious situation. As I have already said—and I do not wish to conceal anything—I fear that in the present situation there is likely to be an increase on this tragic figure in the coming weeks and months. Judging by our estimates, I do not believe that the figure will rise to anything like the total envisaged in certain quarters. This depends on what we and other nations are able to do to meet the whole problem.

Mr. Spriggs

There have been many theories put forward about the causes of unemployment. Many hon. Members believe that under-cutting in prices is causing the closure of many industries, such as textile and glass companies. In St. Helens where Pilkington employ over 17,000 people, hundreds of workers are being made unemployed each year as a result of under-cutting rather than as a result of a reduction in markets. I call upon my right hon. Friend the Secretary of State for Employment to give the message to his Cabinet colleagues that they should conduct a full investigation into the question of dumping and undercutting in this country and in respect of the exporting of unemployment from countries such as Japan to the United Kingdom.

Mr. Foot

My hon. Friend refers to the textile industry. I heard his speech in the House the other day on this subject and I have received deputations from the textile unions on it. I know how strong feelings are, and the strength of those feelings will be expressed in the debate next week. I am not making any comment on the situation that will be discussed then, but it has to be taken into account, not merely by those concerned in the textile industry but by others, that we must consider not only the position in industries which are dependent upon, or may be affected by, imports but also the position of those in the export trade. That aspect has to be taken into account as well. The Government have to decide these things and to make the choice that they believe to be right in the interests of the whole country.

Mr. Ralph Howell

I fully recognise the seriousness of the dramatic rise in the numbers of unemployed and I agree to a great extent with the views expressed by the hon. Member for Salford, East (Mr. Allaun) and the hon. Member for Rochdale (Mr. Smith). Does the Secretary of State agree that the unemployment figures as at present compiled are false and dangerously misleading, that less than 50 per cent. of those classified as unemployed draw any unemployment benefit, that a great number within those figures have no intention at all of getting a job and that there are also a great number of aliens who have never contributed to national insurance at all?

Hon. Members

Disgraceful.

Mr. Foot

I repudiate the hon. Gentleman's suggestion entirely. I do not accept in any sense whatsoever that the seriousness of these figures can be cut down by trying to lop off these figures—100,000 here or there—representing people whom it is alleged do not want to work. That suggestion has been made from the benches opposite. That is why we have examined these unemployment figures in the Department of Employment over a period of many months. All our investigations prove that practically all the people on the unemployed register want jobs but are denied work by a system which prevents them from having it. I do not accept, therefore, that these figures can be disposed of by saying that they represent people who are unable to work or people who do not want to work. The vast majority do want to work, and it is our duty to provide them with jobs.

Mr. Henderson

Is the Secretary of State aware that the rise in Scottish unemployment to almost 130,000 brings the total within a hair's breadth of the record achieved under a previous Tory Government in Scotland? Is he aware that people in Scotland will see these figures as a sign that for Scotland to remain a province of the United Kingdom is a recipe for disaster and that the sooner we are self-governing the better? But as an emergency measure, to protect the jobs of the remaining workers in Scotland, will he now insist that the oil companies and service companies drilling off our coasts buy at least 50 per cent. of their goods and services from companies domiciled in Scotland?

Mr. Foot

Of course it is the case, and has been for many decades in this country, that whenever there has been a serious rise in unemployment, certain parts of the country have been hardest hit, among them Scotland, Wales and the North-East. That has occurred in some degree on this occasion, too, although in some respects Scotland has been slightly more fortunate than some other parts of the country. Therefore, the figures do not prove what the hon. Gentleman suggests. I suggest that they prove the opposite and that what is hurting the country in this respect is spread all over the country, and that we need a fully national solution.

Mr. Heffer

Is it not now quite clear that the hon. Member for Aberdeenshire, East (Mr. Henderson), of the Scottish National Party, is talking absolute rubbish on this matter? Unemployment had affected areas such as Merseyside, with 60,000 unemployed, even before these figures were announced, as it had affected Birmingham, London and every part of the country. Is it not now clear that the Government must begin seriously the process of extending planning throughout the entire economy, and that we can no longer continue with the old type of private enterprise system which has failed the people of this country as it has failed people in Western Europe, North America and every part of the world where capitalism exists? Is it not now clear that the way to begin to deal with these problems, which will not be solved overnight, is by the fundamental transformation of this society to which the Labour Party is pledged?

Mr. Foot

I agree with my hon. Friend that the sooner we can translate into full operation the measures envisaged in the Industry Bill, the sooner we can carry them into practical effect over the whole country and can ensure that investment is supplied by those means, the better it will be for dealing with this kind of problem. But in the meantime we have to take first-aid measures to deal with the situation, to some of which I have already referred, by dealing with the immediate menace of inflation. I believe that those measures are comprised in the agreement which we have made with the General Council of the TUC, and I want to see those measures in practical operation.

Several Hon. Members rose—

Mr. Speaker

Order. I am afraid that we cannot continue what is becoming a debate.